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

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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. Although CEOs, and large-company CEOs in particular, have better traits than the population on average, they are neither exceptional in any of the traits nor their combination. Large-company CEOs belong to the top 5% of the population in their traits, but to top 0.2% in pay. The mismatch between the moderately high trait values and the exceptionally high pay explains why less than a quarter of the CEO pay premium over the population can be attributed to the traits.

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  • Keloharju, Matti & Knüpfer, Samuli, 2014. "Are CEOs Born Leaders? Lessons from Traits of a Million Individuals," Working Paper Series 1024, Research Institute of Industrial Economics, revised 16 Apr 2015.
    • Handle: RePEc:hhs:iuiwop:1024
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    Keywords

    CEO; Cognitive ability; Non-cognitive ability; Height; Compensation; Firm size;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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