Posted: 31 Aug 2011

See all articles by Marianne Bertrand

Marianne Bertrand

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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Date Written: January 2009


This article starts with an overview of the characteristics of chief executive officers (CEOs). I discuss the rising importance of general skills over firm-specific skills and the growing share of externally recruited CEOs. I also discuss possible reasons for the underrepresentation of women and the overrepresentation of family members in the corporate suite. I then review the three main explanations that have been put forward to explain the surge in CEO compensation over the past 30 years: principal-agent view, rent extraction view, and market-based view. I assess the strengths and weaknesses of each of these explanations in light of the existing empirical research. Finally, I review work on how entrenched CEOs or cognitively biased CEOs may cause corporate practices to deviate from the maximization of firm value.

Suggested Citation

Bertrand, Marianne, CEOs (January 2009). Annual Review of Economics, Vol. 1, pp. 121-150, 2009. Available at SSRN: or

Marianne Bertrand (Contact Author)

University of Chicago - Booth School of Business ( email )

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National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR)

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