So concludes a new research paper that used data collected from tests compiled by the Swedish military on men born between 1952 and 1978, who were entering compulsory military service. It then tracked these men’s income, education and service as CEO of any Swedish company – both public and private, small and large. The sample included 1.3m men of whom about 41,000 served as a chief executives.
The findings will add fire to the debate over high compensation for chief executives. Read more
Research for the latest Harvard Business Review ranking of the best-performing chief executives since 1995 – topped by Steve Jobs, as it was in 2010 – also yields some interesting new insights about whether to pick insiders or outsiders to run the company.
The study points out that, overall, insider CEOs do better, ranking on average 154 places higher than outsiders on long-term measures of total shareholder return and increase in market capitalisation. But there was little difference between the performance of insiders and outsiders in continental Europe, China and India. Read more
In the annals of odd academic tasks, trawling through nearly six decades of obituaries for chief executives ranks highly. But, in doing so, Timothy Quigley of Lehigh University has disinterred interesting evidence that the all-powerful CEO is alive and well.
For a paper to be presented to next month’s Academy of Management annual meeting in Boston, Prof Quigley looked at the market’s response to 193 sudden CEO deaths (with causes from plane crash to cerebral haemorrhage) between 1950 and 2009. The magnitude of investors’ reaction, whether negative or positive, was greater in recent years than in the early part of the period. In fact, the share price rise (or fall) for deaths announced between 1990 and 2009 was more than double the reaction in the 1950s and 1960s. Read more
The route to success in corporate India starts early, and it usually goes via business school. That’s one message from new research into the performance of Indian chief executives, from the same stable that brought us what claimed to be the first ranking of the world’s CEOs over their entire tenure.
Insead professors Bala Vissa, Morten Hansen, Herminia Ibarra and Urs Peyer have now produced a compelling ranking of top Indian CEOs, published on Wednesday by Business Today, based on shareholder performance since they took office. It is topped by Naveen Jindal of steel company Jindal Steel and Power (JSPL). Read more
Ricky Ponting has resigned as captain of the Australian national cricket team, but he intends to stay on as a player. If he were chief executive of a business, however talented, he would never try to pick up the threads of his earlier career as, say, a top salesman. Why not?
Ponting, 36, was the most successful international cricket captain ever, but he was widely perceived to have failed recently. His team just lost to India in the quarter-finals of the World Cup. Yet as a batsman, Ponting still has plenty left to offer. Indeed, the World Cup quarter-final saw him return to form, scoring a typically brave century. As he told the press in relinquishing the leadership:
Now that I won’t have all the extra responsibility of the captaincy, I think I can turn myself into a better player than I’ve shown in the last six months.