When to retire is one of the toughest decisions for any executive to make. For a CEO at the top of the pyramid, the decision is rife with complexities. Not only must the CEO relinquish day-to-day control, he or she must cope with the possibility of not having completed the strategic objectives developed at the outset of their tenure.

Like the song goes, “Should I stay or should I go?”

Hanging in there too long can tarnish the CEO’s legacy, while leaving too early may founder the ship. For a graceful exit, a capable successor needs to be in the wings, but this is not always the case. And captivating post-retirement activities must be considered, as it is psychologically damaging to jump off a fast-speeding train onto, well, the couch.

It’s also not easy to give up power. This may explain why many CEOs are getting older. From 2006 to 2018, the number of Fortune 500 CEOs age 65 to 69 more than doubled from 20 to 44, according to research by Korn Ferry provided to Carrier Management. The average age of a Fortune 500 CEO has gone up from 55.4 in 2007 to 57.4 in 2017, according to Spenser Stuart research. (2017 Spenser Stuart U.S. Board Index)

No CEO wants to be accused of overstaying his or her welcome. Sure, lots of people maintain their vigor and intellectual chops well into their 80s. But very few people are old and au courant at the same time, Berkshire Hathaway’s Warren Buffett excluded.

“Many CEOs have a hard time letting go,” said Cecile Alpers-Leroux, an economic anthropologist focused on workplace transformation as Ultimate Software’s vice president of human capital management innovation. “It requires deep reflection to make the leap—a verification of their values, what’s important to them and their aspirations going forward. But leap they must.”

Carrier Management reached out to four insurance company CEOs who have made their leaps, giving the decision the care and attention it deserves. Although their stories are different, they share similar values about life and work. In their reflections on retirement, they sought the counsel of spouses, friends and business colleagues.

“The most successful CEOs are the ones who put aside time to reflect on what they’ve accomplished and what they want in the future,” said New York-based executive coach Alisa Cohn, who works with C-suite leaders and board directors. “Not all CEOs fit this mold. Leadership can be intoxicating; you’re almost in a trance-like state. Your identity gets wrapped up in being the one in charge. But if you overstay your usefulness, it will come back and bite you.”

Company First

Well before he became the CEO of Penn National Mutual Insurance Company in 2010, Ken Shutts knew from personal experience that he didn’t want to work well into his 60s.

“My father, who had worked for Ohio Casualty Insurance Company for 42 years, retired when he was almost 69 years of age,” Shutts recalled. “He and my mother had great plans to do a lot of traveling. Twenty-nine days after he retired, he suffered a massive heart attack and passed away. He never got the chance to enjoy his retirement. It just stuck with me.”

Shutts did not want to encounter the same fate. A sports enthusiast, he divides life into quarters like a football game. With the average life expectancy for American males at nearly 79 years, each quarter consumes about 20 years.

“I’ve been working since I was 13, when my sister got me a job as a busboy at a restaurant where she was a waitress,” said Shutts. “That was the first quarter. Once you hit 60, whether you want to admit it or not, you are entering the fourth quarter of life. I’d been at the company for 35 years, starting out in the legal department. I’d been president of the company for seven years. The time had come to do something else, and I had made preparations here at the company to do it.”

He had a strong desire and commitment to mentoring the senior executives who would move a rung up the ladder following his retirement, including Penn National’s current CEO Christine Sears, the company’s former president and previously CFO. “You want to hand the baton over to someone who is ready to take it and help grow the company further,” he explained. “I took this responsibility very seriously and feel quite secure the organization is in great hands today.”

During his leadership tenure, Shutts guided an important affiliation with Waukesha, Wis.-based Partners Mutual Insurance Company, which is now a part of Penn National. Partners Mutual had a history, culture and mutual insurance structure that deftly aligned with Penn National’s history, culture and structure. It also relied exclusively on independent agents to sell its policies and served customers in Wisconsin and Iowa, two growth markets for Penn National.

“A company needs new ideas, new energy and new oxygen to thrive. CEOs who stay on too long tend to become regimented in how they view things. We all know stories about sports figures that stay in the game past their prime. I’ve always believed it’s better to quit at the top while you still have the passion, vim and vigor to do other things.”

Ken Shutts, former CEO, Penn National Mutual Insurance Company

In making the decision of when to retire, Shutts reached out to his wife, children and friends for their input. The determining factor was his response to a question he always asked his senior executives when they approached him with a difficult decision: “What’s in the best interests of the company?”

“That was my guidepost; it takes your emotions out of the equation,” he said.

Shutts is a firm believer that organizations must continually turn to new leadership to remain relevant and healthy. “A company needs new ideas, new energy and new oxygen to thrive,” he explained. “CEOs who stay on too long tend to become regimented in how they view things. We all know stories about sports figures that stay in the game past their prime. I’ve always believed it’s better to quit at the top while you still have the passion, vim and vigor to do other things.”

His “other things” include membership on Penn National’s board of directors. “My love for the company has never diminished,” Shutts said. “What I miss most about being a CEO is working with our employees and agents, interacting and seeing many of them daily. But I truthfully feel no voids in my life. When I get up in the morning, I look forward to the rest of the day.”

Purposeful Preparations

Terry Cavanaugh gave himself a 10-year tenure when he became CEO of Erie Indemnity Company in 2008, following a 33-year career with Chubb Group of Insurance Companies. Cavanaugh was 55 years old at the time and planned to work until he was 65. His projection was off by one year—he retired a few months shy of his 64th birthday. Close enough. “In my mind, there’s a half-life to being in any job, and as you go up the food chain to become the CEO, it becomes more acute,” he said.

In making the decision to retire, Cavanaugh felt good about his tenure. Under his leadership, Erie Insurance had increased its property/casualty direct written premiums by more than 45 percent and grew policyholder surplus by 60 percent. He was the first senior executive to be hired from outside the company. “The board was frustrated by not having a solid internal candidate to assume the post,” he explained.

Not surprisingly, his initial challenge was to build the organization’s operational and financial skillsets. “Human capital drives success,” he said. “I was acutely aware of the need to recruit and develop talent. Most importantly, I wanted to have a good successor in place when it was time for me to go.”

“I feel the longer the CEO stays on, even if they’re successful and energetic, it adversely affects the succession management plan. It doesn’t send a good message to the executive team and can create organizational apathy.”

Terry Cavanaugh, former CEO, Erie Indemnity Company

As he got closer in age to 65, the year he had established for his retirement, Cavanaugh reflected on whether or not his timing was right. “Some CEOs don’t have good self-awareness; others get to the point where the job becomes so much a part of their identity they can’t walk away comfortably,” he said. “I took inventory of how I felt intellectually, emotionally and physically about the company’s state and my own future.”

Eight and a half years had passed since he became CEO, and he realized another year and a half wouldn’t make much of a difference to the company and his legacy. “But it might extend the length of my lifespan not having to deal with all the stress and eat restaurant food on the fly anymore,” he added.

In his talks with former CEOs who had confronted the prospect of retirement, they often mentioned the pressure they felt from board directors requesting they stay on longer. “I feel the longer the CEO stays on, even if they’re successful and energetic, it adversely affects the succession management plan,” he said. “It doesn’t send a good message to the executive team and can create organizational apathy.”

A more personal reason to move on with life is the realities of aging. “When you hit 64 and look in the mirror, you realize it’s harder to be courageous—to take innovative risks,” he confided. “Fortunately, I had groomed people to take over. It was their time now.”

Cavanaugh lives half the year today in Naples, Fla., where he often runs across other former CEOs. “I met this one fellow who said, ‘Terry, you and I are PIPs. I asked what he meant and he replied—’Previously Important People.’ Made me laugh.”

Nowadays, he puts his considerable business acumen to work as a member of two boards and is an executive coach to C-suite leaders. “My advice to them is to retire while they’re still champions,” he said.

Knowing the End Game

Jim Kennedy retired as the CEO of Ohio Mutual Insurance Group when he turned 63 years old in 2015, having served in the post since 2003. Like Shutts, Kennedy had made the decision to retire in his 60s for personal reasons. When he was 57, his older brother, an executive at another insurance company, passed away at the age of 64 from a sudden heart attack.

“Coming to grips with the fragility of life made me consciously think about my own retirement,” said Kennedy. “None of us know how long we have left on this planet. And there were other things I wanted to do with my life than just work.”

His family lineage was close in mind throughout his retirement deliberations. “My father was a car salesman working on commission who never earned a dime of salary; he didn’t have the money to retire early and do the things he’d wanted to do,” he said. “Fortunately, I was in a financial position that I could retire. After I hit 60, my wife and I had these long conversations about what we wanted our future together to look like. She was supportive of whatever I wanted, she said.”

“I didn’t want to die in the chair. But I also wanted to be sure when I left that the financials and operations were solid to pass on to someone else to take the company further.”

Jim Kennedy, former CEO, Ohio Mutual Insurance Group

He realized that running a large insurance company had consumed much of his time and energy, entailing quite a bit of travel. “I didn’t want to die in the chair,” said Kennedy. “But I also wanted to be sure when I left that the financials and operations were solid to pass on to someone else to take the company further.”

They were. During Kennedy’s tenure, Ohio Mutual’s premium revenue increased by 78 percent, surplus nearly tripled, and assets expanded by 140 percent. The company had grown from one state market to seven. He had done his best and let go of the reins in 2015.

“I’ve got no regrets retiring when I did, although I do miss the interactions with people and the collegial effort of everyone coming together and putting their minds around a problem and solving it,” he said. “But I planned my retirement well before I saw the finish line.”

Today, he sits on the board of Harford Mutual Insurance Company in Bel Air, Md., and the board of a local college. He provides operational consulting services to insurance companies and is actively engaged at the National Association of Mutual Insurance Companies. “I’m teaching people how to become a successful board director,” he said. “There’s a need for it.”

Hanging On Because You Have To

Warren Heck was 64 years old when he became CEO of GNY Insurance Companies and 78 when he retired. In between, he twice tried to retire, but the executives in line to succeed him either didn’t stand up to further scrutiny or decided to leave the company.

“I knew at the age I was when I became CEO that I didn’t have much time to find a successor to carry on, but it was much harder than I had imagined,” said Heck, who prior to becoming GNY’s CEO had been its president and chief operating officer for a lengthy 18 years.

Heck, who retired in 2014, was hale and hearty at the time of his decision and remains physically and intellectually sharp today at 82.

“Looking back, I honestly never cared if I became CEO or not; I was interested in running the company,” he said. “All I wanted was to be in charge of some objective and couldn’t care less about the title. My predecessor was different; he held onto the job like it was his lifeline. But as long as he let me run the company, I didn’t care if he remained CEO.”

“Looking back, I honestly never cared if I became CEO or not; I was interested in running the company. All I wanted was to be in charge of some objective and couldn’t care less about the title. My predecessor was different; he held onto the job like it was his lifeline. But as long as he let me run the company, I didn’t care if he remained CEO.”

Warren Heck, former CEO, GNY Insurance Companies

With regard to his own long tenure, Heck shares Shutts’ philosophy that the company’s interests always come ahead of the CEO’s needs. “If you’re deeply and emotionally connected to the company, you want it to succeed after you leave,” he said. “To do that, you have to find someone who will put the interests of the business ahead of their own. It took more time than I’d imagined to find that person.”

Lengthy CEO tenures are common at GNY. Heck is only the fifth CEO in the company’s 104-year-old history.

“I love insurance, so it wasn’t a burden to lead the company in my 70s at all,” he said. “People have always told me I don’t look my age. But I knew I was getting older and running out of time. Every now and then a board director would point out that I was getting a little long in the tooth, but nobody was aggressive about it and I appreciate the fact that they did point it out. Still, I had to find a successor.”

He finally did. Heck’s daughter Elizabeth, GNY’s former president and chief operating officer, is the company’s CEO today. “The board asked for the names of three people as my successor, and Elizabeth was one of them,” he said. “I suggested her because she’s a financial person who has a CPA and worked for one of the big accounting firms, as well as at other insurance companies. I told the board to treat her as one of the candidates. Elizabeth impressed them with her knowledge and expertise. They gave her the job and she’s doing great work today.”

Heck, who remains on GNY’s board as its non-executive chairman, left the company in terrific shape. In 2014, it tallied $315 million in direct written premium, a $430 million surplus and close to $1 billion in assets.

Does he miss the thrill of running a big insurance business? “Not at all,” said Heck. “I retired not because I didn’t have the energy to continue or the company was becoming unsuccessful—far from it. I would have retired years before if we’d had the right leadership in place to take over.”

Humility, Not Hubris

Each of the former CEOs feels a tremendous sense of accomplishment at leaving the organization in better shape than when they took the top post. None fell prey to the addictive charms of being in charge, putting the company’s best interests first. They loved the job and the small intimacies that occur in all business dealings, but they had other fish to fry and new lives to create.

Best of all, they did not want to squander the knowledge and expertise they had accumulated through decades of hard work. “The best CEOs take all the business lessons they’ve learned over a lifetime and contribute them to boards, small businesses and students,” said Cohn. “They’re used to making a positive difference.”

As for the “right age” for a CEO to retire, Cohn said it’s irrelevant. “The decision has to do with the individual’s values, not the number of years they’ve lived,” she said.

Still, every CEO has an expiration date. Appreciating this fact is crucial to ensuring the next leader will grow the business further. As the former CEOs’ stories indicate, successful succession management is not a breezy walk in the park.

“It’s vital that a CEO choose someone to succeed them who will honor their legacy and yet also take the organization in the direction it needs to go,” said Alpers-Leroux. “But if you stay on too long and don’t let that person lead, you’re doing a disservice to them and the company.”

As always, timing is everything.