Abstract

http://ssrn.com/abstract=2436765
 


 



Match Made at Birth? What Traits of a Million Swedes Tell Us About CEOs


Renee B. Adams


University of New South Wales; Financial Research Network (FIRN); European Corporate Governance Institute (ECGI)

Matti Keloharju


Aalto University - School of Business; Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Samuli Knüpfer


London Business School; Centre for Economic Policy Research (CEPR); Research Institute of Industrial Economics (IFN)

May 13, 2014

IFN Working Paper No. 1024

Abstract:     
This paper analyzes the role three personal traits — cognitive and non-cognitive ability, and height — play in the market for CEOs. We merge data on the traits of more than one million Swedish males, measured at age 18 in a mandatory military enlistment test, with comprehensive data on their income, education, profession, and service as a CEO of any Swedish company. We find that the traits of large-company CEOs are at par or higher than those of other high-caliber professions. For example, large-company CEOs have about the same cognitive ability, and about one-half of a standard deviation higher non-cognitive ability and height than medical doctors. Their traits compare even more favorably with those of lawyers. The traits contribute to pay in two ways. First, higher-caliber CEOs are assigned to larger companies, which tend to pay more. Second, the traits contribute to pay over and above that driven by firm size. We estimate that 27-58% of the effect of traits on pay comes from CEO’s assignment to larger companies. Our results are consistent with models where the labor market allocates higher-caliber CEOs to more productive positions.

Number of Pages in PDF File: 56

Keywords: CEO, cognitive ability, non-cognitive ability, height, compensation, firm size

JEL Classification: G30, J24, J31

Accepted Paper Series


Download This Paper

Date posted: May 15, 2014 ; Last revised: June 2, 2014

Suggested Citation

Adams, Renee B. and Keloharju, Matti and Knüpfer, Samuli, Match Made at Birth? What Traits of a Million Swedes Tell Us About CEOs (May 13, 2014). IFN Working Paper No. 1024. Available at SSRN: http://ssrn.com/abstract=2436765

Contact Information

Renée B. Adams
University of New South Wales ( email )
Sydney, NSW 2052
Australia
+61(2)93854280 (Phone)

Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Matti Keloharju
Aalto University - School of Business ( email )
P.O. Box 21210
AALTO, FI-00076
Finland
+358 40 353 8043 (Phone)
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Samuli Knüpfer (Contact Author)
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
HOME PAGE: http://faculty.london.edu/sknupfer
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
Feedback to SSRN


Paper statistics
Abstract Views: 953
Downloads: 149
Download Rank: 113,791
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.594 seconds