Are CEOs Born Leaders? Lessons from Traits of a Million Individuals
Renee B. Adams
University of New South Wales; Financial Research Network (FIRN); European Corporate Governance Institute (ECGI)
Aalto University - School of Business; Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)
London Business School; Centre for Economic Policy Research (CEPR); Research Institute of Industrial Economics (IFN)
April 15, 2015
IFN Working Paper No. 1024
FIRN Research Paper
Our study combines a near-exhaustive sample of CEOs of Swedish companies with data on their cognitive and non-cognitive ability and height at age 18. Although CEOs, and large-company CEOs in particular, have better traits than the population on average, they are neither exceptional in any of the traits nor their combination. Large-company CEOs belong to the top 5% of the population in their traits, but to top 0.2% in pay. The mismatch between the moderately high trait values and the exceptionally high pay explains why less than a quarter of the CEO pay premium over the population can be attributed to the traits.
Number of Pages in PDF File: 57
Keywords: CEO, cognitive ability, non-cognitive ability, height, compensation, firm size
JEL Classification: G30, J24, J31
Date posted: May 15, 2014 ; Last revised: April 16, 2015
© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.
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