You’ve Had a Successful PE Exit – Now What?

Life after being a CEO – The emotional crash after CEOs hang up their spikes.

Over the past thirty years, we have noticed an almost universal issue among the CEOs we have coached.  They are afraid of retiring because of boredom and not knowing what they would next do with themselves. Some may feel they are at their careers’ peak and still have much to contribute. Others may enjoy the power and prestige of being a CEO and find it hard to let go. Additionally, some CEOs may have a strong sense of responsibility towards their company and employees and feel they can’t leave them in the lurch. 

We have met with many former CEOs who are miserable after retirement. They use financial advisors for retirement planning, but few have a life plan to prepare for the emotional aspects of retirement.

Most of the CEOs we work with lead PE portfolio companies. Many of these CEOs experience an equity event that rewards their success with life-changing money. Often these CEOs drive exit strategies that leave them without a new role.  Or in other instances, the company can have a mandatory retirement age of 65 or later. In October 2000, Jack Welch announced the biggest deal of his 20-year tenure as head of GE: a $45 billion merger with Honeywell. Shortly thereafter, he was forced to retire due to GE’s mandatory retirement policy for CEOs turning 65. More than a third of S&P 500 firms have a mandatory retirement policy for their CEO.

A sitting CEO can prepare for life after retirement in several ways:

1. Develop a plan: A CEO should develop a plan for their retirement that includes a clear timeline, goals, objectives for the future, and a vision for their post-retirement life.
2. Build a strong team: A CEO is duty bound to ensure that they have a strong team in place that can take over the running of the company once they retire.
3. Stay involved: A CEO can stay engaged in the company after retirement by joining the board of directors or becoming an advisor or mentor.
4. Seek out new opportunities: A CEO can seek new opportunities, such as starting their own business, investing in startups, or becoming a venture capitalist.
5. Consider philanthropy: A CEO can consider engaging in philanthropy, which can be a fulfilling way to give back to their community and make a difference in the lives of others.
6. Prepare emotionally: Retirement can be a significant life change, so a CEO should be emotionally prepared for it. They should seek the help of a counselor or therapist to help them navigate this transition.

Overall, preparing for life after retirement is a process that should start well before the actual retirement date. It involves personal and professional planning, staying engaged, and making the most of opportunities.

 SO, NOW WHAT?

Most CEOs have insulated themselves in the mainstream of business for so long that they know no other way of being for self-actualization.  One of the constant questions we get from both sitting and retired CEOs of mid-cap companies is how do I obtain a board seat?

Two suggestions on how to position yourself for board service

1. Market yourself.Let others know about your contributions and the value you have created in prior companies, and announce your interest in serving on a board. Raise your visibility through publishing articles in newsletters like Medium Daily Digest or Business Insider. Befriend business news reporters and offer to be a source—return search executive’s calls. Attend or speak at conferences.
2. Network.The executive space is a highly networked world, and board members often obtain their positions through existing connections. Larry Page and Sergey Brin, co-founders of Google, are friends with Elon Musk and Larry Ellison.  Jeff Bezos and Barry Diller are friends.

Reach out to people who are on the board of a company. They are already in that exclusive executive network. Not only will they know about their current company, but they will also hear about other opportunities. Connect through common backgrounds—the same alma mater, volunteering in similar areas, serving on the boards of similar nonprofits. Investment bankers with whom you have developed relationships can also be very helpful in identifying board opportunities. They often know the next evolution of companies that are transacting. LinkedIn and other social media are valuable sources. Keep your contacts current.

Develop a Psychologically Rich Life

Another area to consider before retirement is developing a psychologically rich life.   In a 2021 paper published in Psychological Review, Shigehiro Oshi and Erin Westgate propose that “psychological richness is another neglected aspect of what people consider a good life.” Unlike happy or meaningful lives, psychologically rich lives are best characterized by various interesting and perspective-changing experiences.

They presented empirical evidence that happiness, meaning, and psychological richness are related but distinct and desirable aspects of a good life. They showed that a nontrivial number of people worldwide report they would choose a psychologically rich life at the expense of a happy or meaningful life and that approximately a third say that undoing their life’s biggest regret would have made their lives psychologically richer.

Furthermore, Oshi and Westgate propose that the predictors of a psychologically rich life are different from those of a happy life or a meaningful life and report evidence suggesting that people leading psychologically rich lives tend to be more curious, think more holistically, adventurous, and lean more centrist politically.

Conclusion

By preparing now, you can build an exciting and rich next stage of your life. Or you can tell yourself you are too busy and ignore the preparation and eventually be the person sitting at lunch at your country club and bitching about how bored you are.