We love companies with managers who have been in place for long stretches. They remember what works and what doesn't during rough patches. They strategize intelligently because they know their markets and rivals well.
For the 440 companies that have been in the S&P 500 for a decade, the average chief executive tenure is 4.3 years and the average stock return is 12.2% annually. Of that group, 42 companies have had one chief executive in place for the whole 10 years. These stocks gained 18% annually. True, this performance difference doesn't establish a predictive value for long tenures; to a large degree it reflects the fact that a chief executive will not be shown the door when the stock is doing well. What's also true is that performance is not a random event. Some bosses can keep delivering it.
Buy Toolmaker Black & Decker (nyse: BDK), Carnival (nyse: CCL - news - people ) (38, CCL)
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For the 440 companies that have been in the S&P 500 for a decade, the average chief executive tenure is 4.3 years and the average stock return is 12.2% annually. Of that group, 42 companies have had one chief executive in place for the whole 10 years. These stocks gained 18% annually. True, this performance difference doesn't establish a predictive value for long tenures; to a large degree it reflects the fact that a chief executive will not be shown the door when the stock is doing well. What's also true is that performance is not a random event. Some bosses can keep delivering it.
Buy Toolmaker Black & Decker (nyse: BDK), Carnival (nyse: CCL - news - people ) (38, CCL)
Read the complete column
