60 Pages Posted: 15 May 2014 Last revised: 9 Sep 2017
Date Written: September 3, 2017
What makes a successful CEO? We combine a near-exhaustive sample of CEOs of Swedish companies with data on their cognitive and non-cognitive ability and height at age 18. CEOs differ from other high-skill professions most in non-cognitive ability. The median large-company CEO belongs to the top 5% of the population in the combination of the three traits. The traits have a monotonic and close to linear relationship with CEO pay, but their correlations with pay, firm size, and CEO fixed effects in firm policies are relatively low. Traits appear necessary, but not sufficient for making it to the top.
Keywords: CEO, cognitive ability, non-cognitive ability, height, compensation, firm size
JEL Classification: G30, J24, J31
Suggested Citation: Suggested Citation
Adams, Renee B. and Keloharju, Matti and Knüpfer, Samuli, Are CEOs Born Leaders? Lessons from Traits of a Million Individuals (September 3, 2017). IFN Working Paper No. 1024; FIRN Research Paper No. 2436765; Harvard Business School Research Paper No. 16-044; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 478/2016. Available at SSRN: https://ssrn.com/abstract=2436765