Are CEOs Born Leaders? Lessons from Traits of a Million Individuals

59 Pages Posted: 15 May 2014 Last revised: 2 Sep 2016

Renee B. Adams

University of New South Wales, Department of Banking and Finance; ECGI; FIRN; ABFER

Matti Keloharju

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

Samuli Knüpfer

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

Date Written: September 1, 2016

Abstract

What makes a CEO? 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. On average, CEOs, particularly large-company CEOs, have much higher trait values than the population and somewhat higher values than people in other high-skill professions. Yet, more than one hundred managers and executives in the corporate sector dominate each median large-company CEO. Only about one tenth of the pay premium large-firm CEOs enjoy over the population can be attributed to the labor market returns to the three traits.

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

JEL Classification: G30, J24, J31

Suggested Citation

Adams, Renee B. and Keloharju, Matti and Knüpfer, Samuli, Are CEOs Born Leaders? Lessons from Traits of a Million Individuals (September 1, 2016). 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

Renée B. Adams

University of New South Wales, Department of Banking and Finance ( email )

Sydney, NSW 2052
Australia
+61(2)93854280 (Phone)

ECGI

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

FIRN

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

ABFER

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

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)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

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

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Research Institute of Industrial Economics (IFN)

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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