Does School Matter? An Empirical Analysis of CEO Education, Compensation, and Firm Performance

International Business and Economics Research Journal, Vol. 1, No. 1, pp. 83-98, Winter 2002

14 Pages Posted: 27 Aug 2009 Last revised: 10 May 2011

See all articles by Terrance Jalbert

Terrance Jalbert

University of Hawaii - Department of Business Administration

Ramesh P. Rao

Oklahoma State University - Stillwater - Spears School of Business - Department of Finance

Mercedes Jalbert

The Institute for Business and Finance Research

Date Written: 2002

Abstract

In this paper the educational background of the Chief Executive Officers (CEOs) of Large U.S. Firms are examined. Specifically, the educational background of CEOs from large U.S. firms, as identified in the Forbes 800 Compensation List, are examined. Information concerning the number of Chief Executive Officers that received their undergraduate and graduate degrees from 463 institutes of higher education are compiled. We find that most CEOs have an undergraduate degree, while about half possess a graduate degree. The results indicate that there are preferred educational backgrounds for selection as the CEO of a major corporation. We also examine how the educational background of the CEO is related to the CEO’s total compensation. The evidence indicates that those CEOs that do not have a degree earn significantly more than those CEO’s that do have a college degree. We find little evidence that the school attended affects the compensation that the CEO receives. Finally, we examine firm ROA and Tobin’s Q based on the educational background of the CEO. We find an association between possession of a degree as well as where the degree was earned and the ROA and Tobin’s Q of the firm.

Keywords: CEO Compensation, CEO Education, CEO Performance

JEL Classification: G3, J30

Suggested Citation

Jalbert, Terrance and Rao, Ramesh P. and Jalbert, Mercedes, Does School Matter? An Empirical Analysis of CEO Education, Compensation, and Firm Performance (2002). International Business and Economics Research Journal, Vol. 1, No. 1, pp. 83-98, Winter 2002. Available at SSRN: https://ssrn.com/abstract=1461643

Terrance Jalbert (Contact Author)

University of Hawaii - Department of Business Administration ( email )

808-974-7456 (Phone)

Ramesh P. Rao

Oklahoma State University - Stillwater - Spears School of Business - Department of Finance ( email )

Spears School of Business
Stillwater, OK 74078-4011
United States
405-744-1385 (Phone)
405-744-5180 (Fax)

Mercedes Jalbert

The Institute for Business and Finance Research ( email )

P.O. Box 5569
Hilo, HI 96720
United States

HOME PAGE: http://www.theIBFR.com

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