A new generation of bank CEOs is coming up through the ranks, following different paths than their predecessors. iStock image

As the age of bank chief executive officers rises, the next generation of leaders will take a different path to the top than their predecessors.

According to a report from Truist Securities, the median age of a bank CEO across the United States has increased by 10 years since 2002. Additionally, over half of bank CEOs are older than 65, which is up from around 20 percent in the same time period.

The trend isn’t unique to the financial sector; Truist research showed that in corporate America as a whole, the age of CEOs has increased by 10 years over the past 20 years.

What is unique is how long bank CEOs are staying in their jobs. Bank CEOs had the second-longest tenures in corporate America, beaten only by the technology sector. The average tenure for a bank CEO was nine years, according to Truist.

“The advantages of having a more experienced and longer tenured CEO seem clear especially in a highly technical industry like banking,” the report read. “For example, leadership continuity can foster consistent strategy, ensuring the franchise is aligned around specific long-term goals or targets over time. Culture remains intact, aiding talent retention and recruitment. Experience managing risk across cycles also helps to build institutional expertise.”

Metro Credit Union President and CEO Robert Cashman also believes that recent economic downturns have seen CEOs stay on longer than in the past. With the COVID-19 pandemic and other world events creating economic instability, he believes that they stayed on to bring some stability.

“That just may mean that, given some of the things that are going on in today’s ever-changing world, that someone needs to be in the position longer,” he said. “Making sure they’re working their way through a transaction, working your way through an economic cycle. Maybe it’s a core conversion, maybe it’s a change of personnel. Whatever it may be, people may be putting a little bit more thought into making sure that before they leave, they want everything to be solid, and as such, some of these time frames maybe have gotten elongated.”

Dedham Savings Bank Chief Executive Officer Peter Brown is retiring at the end of 2026. He will be 69 when he retires and is replaced by Victoria Kane who is currently serving as president.

Brown had been in banking since he was in college and will retire with 46 years of experience to his name. Part of the reason for his retirement is that with a background in commercial lending, he gladly admits it can be difficult to keep up with the ever-changing digital transformation of banking.

But also after the passing of his wife nine years ago, Brown’s perspective on life shifted. Around that time is when succession planning started, which will culminate with Kane taking over as CEO.

Reading Cooperative Bank President and CEO Julieann Thurlow also highlighted how long the decision to retire can take. This can involve an inward reflection of thinking about what life will look like after leaving the workforce.

“I also believe you need to plan for retirement,” she said. “I can’t imagine waking up one day and simply deciding to call it quits, unless prompted by a medical awakening. We need to figure out what other interests exists or what the next thing will be.”

More M&A

With CEOs staying in their positions for longer, younger employees and potential leaders are stuck waiting for jobs to open up. Thurlow also believes that consolidation in the industry has not just affected the number of institutions, but is also limiting opportunities for the next generation of leaders.

“I think industry consolidation has limited the opportunities for our best executives, and we need to intentionally provide opportunities for their development and to exercise their leadership within the organization,” she said. “I also have observed a lot of leadership teams where the top executives are all the same generation. Intentional succession efforts are necessary to ensure the next-generation team is prepared for all the C-suite seats, not just the CEO.”

For Brown, a recent merger with South Shore Bank was partially motivated with an eye to the future and a roadmap for retirement.

“With our affiliation with South Shore Bank, which there was a little bit of a succession play in that merger,” he said. “That was part of the reason why we did it, so I could look three years down the road when we did the merger and effectively retire.”

New-Look CEO

But with banking also becoming more focused on digital tools and evolving technologies, the background needed to be a CEO may change. Brown believes that some future bank CEOs will come from a technological background rather than a purely lending background like himself.

“We place tremendous value on the talent that we bring in on the technology side and want to create long-term career paths for them,” Brown said. “With the understanding that if you come up through the IT side of things, the operation side of things, or even the risk side of things that would make you as an equal candidate to be a CEO, as somebody that came up through the more traditional ways, the finance side or the lending side. There’s more opportunities for those folks. 10 years ago, 15 years ago, you didn’t see that.”

Additionally, Cashman believes that younger generations are looking to become more well-rounded employees. But with jobs being limited, this can cause individuals to have to move to various different organizations rather than staying at a single company for their entire career.

“Now what you’re seeing is not necessarily accounting, finance or lending aspects, you’re seeing people that have a very strong operational background, technology background, and a different perspective on things,” he said. “With that in mind, that just means that people may not be within the same organization for a long period of time. It could be more of a jungle gym, where people may be moved from organization to organization, department to department, gaining knowledge in a variety of different capacities.”

For banks looking for these next generation leaders, the prospects of being a larger institution and merging with or purchasing another institution can help to attract them. Brown noted that Dedham Savings Bank has been aided in attracting highly knowledgeable technologically focused employees now that it is part of a larger organization.

Sam Lattof

“The amount of talent that we’ve been able to attract on all fronts, but particularly on the technology side, has really elevated,” he said. “We’re able to attract people because we’re a larger, more complex organization. I think if we had been independent, we may not have been able to attract those people.”

Overall leaders interviewed for this story feel that there is a bright future for the next generation.

“I think that there is a strong opportunity for the next generation to lead within the financial service industry,” Cashman said. “I think that’s bright. I just don’t think that the path is going to be your traditional path.”