A familiar story at investment committees goes like this. The sponsor backs the founder, who is a great operator but has never run a company of this size. Eighteen months in, the plan is behind. The partners agree it is probably time for a change, and agree to wait one more quarter. A year later they make the change anyway, and someone asks why they did not do it sooner.
There is data on that question. It seems to point one way, and the researchers call their own analysis exploratory. Both parts matter.
How common it is
Replacing the CEO is the norm in private equity, not the exception. AlixPartners' March 2026 survey of 174 PE leaders and 253 portfolio executives found 65% of firms report CEO turnover during the holding period, and only 9% say they rarely replace CEOs. A study of 192 US buyouts, summarized by Adastrum Consulting, found 71% changed CEO by the end of 2021. Change rates were 22.4% in year one and 18.8% in year two, then between 10.8% and 17.5% a year after that.
Share of 192 US buyouts (enterprise value over $1 billion, 2010 to 2016) that changed CEO by the end of 2021, as summarized by Adastrum Consulting from the Gompers, Kaplan and Mukharlyamov study.
Adastrum Consulting, summarizing published academic researchWhat the return numbers show
The same summary reports average gross multiples of invested capital by when the CEO changed.
| Timing of CEO change | Average gross MOIC | Deals |
|---|---|---|
| No change | 2.85x | 54 |
| Change in year 1 | 2.99x | 39 |
| Change after year 2 | 2.30x | 62 |
| External CEO in year 1 | 3.09x | 30 |
| External CEO after year 2 | 2.16x | 43 |
It is tempting to read this as "change early, hire from outside." The gap is about 0.65x between an external CEO in year one and the other deals. It is also the part of the analysis the summary flags as significant only at the 10% level, and the authors describe their returns analysis as exploratory. We are relying on a published summary of the study, so read the primary paper before you cite these numbers to your investment committee.
The two things it cannot tell you
It cannot say why. Sponsors do not choose when to change a CEO at random. A CEO replaced in year one is often a planned change that was part of the deal thesis, in a company the sponsor understood well. A CEO replaced in year four is often replaced because the business is struggling. Late changes would look worse even if timing made no difference.
It cannot say whether your CEO is the problem. The study measures averages across 192 deals. It cannot tell you about the one in front of you.
The data cannot tell you to fire the CEO. It can tell you that waiting is how most sponsors end up deciding.
Where the evidence is on firmer ground: waiting
Russell Reynolds interviewed 40 leaders, 25 at premier PE firms and 15 current or former portfolio CEOs. 97% named assessing and upgrading the executive team as a priority for the first six months. The authors suggest assessing the team and starting searches within three months, against a typical 12 to 18.
That gap is the real finding. Sponsors say they know what to do and wait a year or more to do it. In an AlixPartners survey of 53 firms from 2018, cited in the same summary, 72% of those that backed existing management and later replaced the CEO waited more than a year. And when a CEO leaves unexpectedly, the PE firm makes the call in 92% of cases, yet only 43% of PE firms and 29% of portfolio executives say they have a successor in mind.
The cheap moves that are safe either way
You do not need to decide to replace anyone to act early. These moves cost little and pay off in either case.
- Assess in the first 90 days. Not a verdict, just a written view of each seat against the plan.
- Build the bench quietly. A confidential market map of who could run the company, and who has already run one like it. It makes no announcement and starts no search.
- Name a successor path. For each key seat, an internal candidate, an external candidate or a fractional cover, written down.
- Set the decision date. Pick a date on which the board will decide whether to start a search. Putting it in the calendar removes the drift.
If the CEO is doing well, you have spent a few weeks of effort and learned who the market thinks is good. If the CEO leaves tomorrow, you are the 43% with a successor in mind.