Multi-CEOs: Toward a Theory of Executives Leading Multiple Firms

Abstract

The Chief Executive Officer (CEO) is critical to a firm’s success and the position is commonly considered to be extremely demanding. It is thus surprising that some individuals are “multi-CEOs,” i.e., they simultaneously hold the CEO position in multiple firms. I study four such multi-CEOs using a case-study approach to understand why and how multi-CEOs are appointed and how they conduct themselves while in office. My findings suggest that multi-CEO appointments require special circumstances regarding corporate control or CEOs’ legitimacy. Boards seem reluctant to appoint multi-CEOs and may initially opt to create such arrangements only ad interim. Interestingly, making these ad interim arrangements permanent appears to not be contingent on firm performance, and helped by CEOs’ prior public commitments to their first CEO positions. Further, multi-CEOs publicly bill their appointments as undesirable yet inevitable and not detrimental to firm performance. They avoid conflicts of interest by running firms that are not in competition or by following specific decision rules. Compensation schemes vary but are all highly symbolic. In their daily work, multi-CEOs respond to physical presence requirements through headquarter co-location or travel and exhibit specific patterns in their time allocation. Finally, multi-CEOs utilize Chief Operating Officers (COOs), or tend to face public pressure to do so.