Top CEOs Research Articles

Top CEO Awards and Firm Profitability

Top CEO Awards and Firm Profitability

Exploring the longevity of global foodservice brands; top CEO’s reveal how their companies have survived and thrived for over 50 years

As a global study on prominent foodservice brands, the study focuses on longevity challenges facing the industry. Few startups manage to withstand and thrive within the industry for longer than a decade. The research collects data from three prominent foodservice firms with global recognition namely, Burger King, Paul Bakery, and Starbucks. The particular study is unique in its utilization of prominent leaders with the given companies and focusing on exploring and identifying the effective strategic methods associated with longevity. More so, the journal uses a multiple-case, multiple-unit case approach to examine the data within each situation and across numerous situations. The results revealed a strong connection between business longevity and the following variables namely organizational culture, technology and innovation, leadership, and organizational strategy. Conclusively, the findings call for the creation of a cultural pseudo-community around firms and customization of leadership techniques and organizational strategies.

Employee approval of CEOs and firm value: Evidence from Employees' choice awards

Using Glassdoor's list of “Top CEOs by Employees' Choice,” we adopt a regression discontinuity (RD) specification to establish a causal link between the employee approval of CEOs and firm value. Having a CEO included in the top list results in an increase in firm performance in both stock returns and return on assets. Having a top CEO significantly increases a firm's employee efficiency, attraction to future employees, hiring of high-quality laborers such as inventors, and attraction to the customers. Our findings establish that the CEO-employee relationship is an important, though intangible, component of a corporation, and we emphasize the critical role of perceived corporate culture in the spirit of Guiso et al. (2015).

Redefining business strategy in a post-pandemic world: Interviews with two CEOs

ABSTRACT This paper is based on the findings from research interviews with two of Canada’s top CEOs, Tim Gitzel of Cameco Corporation and Scott Banda of Federated Co-operatives. The CEOs offer seven managerial considerations for post-pandemic organizational change and value creation. Specifically, the CEOs believe that honesty first, a focus on essentials, the human condition in decision making, the need for bold leadership, the necessity to embrace failures, managing the organizational culture, and fractal strategy are keys to success as we move forward after COVID-19. The last two years have been extraordinarily challenging for most businesses. This paper offers insight into how to manage through the transition and prepare for new realities in order to remain competitive in the post-pandemic business landscape.

Glassdoor: Are the Top CEOs Representing the Best Investments

In 2013, Glassdoor launched the Employees’ Choice Awards for the Top CEOs. Glassdoor’s awards are unique in that feedback from employees exclusively determines the winners. Given Glassdoor’s notoriety, claiming 64 million unique visitors and 11 million job listings monthly, being listed as a Top CEO certainly has reputational value — but does it translate to higher shareholder returns? We find that the overall Top CEO sample statistically outperforms a matched sample and the S&P 500 index on a raw and risk-adjusted basis with superior Tobin’s Q and annual returns one year after the announcement.

Power, Policy, and the Compensation of Top Executives

This article contributes to the quantitative analysis of international differences in executive compensation with a novel emphasis on the role of political drivers—specifically, labor power, owner power, and executive power—while controlling for market factors. It leverages nested analysis, pairing a 2016 cross-sectional analysis of 179 firms in 20 countries with case studies of Finland, from 1971 to 2017, and the United States, from 1936 to 2016. The 2016 cross-sectional analysis of the world's largest firms finds market forces are important, but leave a large portion of international differences in top executive compensation unexplained. Also important are labor power and executive power. Similarly, while controlling for market forces, the longitudinal case studies of large firms in the US and Finland each find stronger labor power relative to executive power associated with lower executive pay. The theoretical framework advanced in this paper helps to explain why top CEO pay—and consequent top-end income inequality—are each extreme in certain countries and periods, and modest in others.

The Corporate Purpose Debate, 2018–20 Edition

A debate has been raging across the world about what the purpose of the modern corporation should be. While the debate is certainly not new, the most recent point of ignition has been a statement from the Business Round-table, a group of America’s top CEOs, about the purpose of the corporation. Parallelly, the UK corporate governance code has been amended to reflect the new expectations from companies; and in Australia, the ASX Corporate Governance Principles were amended with similar themes. This article will survey these developments in the US, UK, and Australia, summarize the academic discussion around this, and finally reflect on what this means for corporations in these countries. The article will argue that rather creating a big shift to stakeholder centric governance, these developments, at least in the UK and Australia, signify a focus on corporate culture and the relationship of company management with employees. This focus on culture and employees is aimed at preventing, or addressing at an earlier stage, egregious corporate scandals. In conclusion, the article will discuss the implications of these developments for India.

I am More than a Caricature: Why Some CEOs Openly Invest in a Serious Leisure Interest

This paper examines why some top CEOs not only invest significant time and resources in a “serious leisure” non-work interest but also freely communicate about it. We investigate this phenomenon in a two- stage study: first by analyzing media mentions of serious leisure for CEOs of S&P 500 companies, the largest listed US corporations, and second by interviewing 15 CEOs of S&P 500 or comparable companies who have a passionate nonwork interest. We first discover that CEOs assign their serious leisure identity an important role in shaping who they are as leaders and how they are perceived, and we further unpack how this shaping process occurs. Our findings challenge the traditional view of leaders’ work and nonwork lives as separate worlds as well as the common perception that CEOs portray themselves as exclusively dedicated to their leader role. We open for discovery a little-explored area at the intersection of the leader identity work and the nonwork-to-work enrichment literatures, specifically the role of a serious leisure identity in leaders’ identity work. Our findings suggest that nurturing a serious leisure interest may prove a valuable asset for leaders’ lifelong development. Keywords: leader authenticity; serious leisure; leader identity work; CEO.

On the 2019 Business Roundtable “Statement on the Purpose of a Corporation”

The Business Roundtable, a large group of top CEOs, recently issued a statement defining the purpose of the corporation in stakeholder terms, a direct and intended reversal from an earlier statement that defined the duty of directors as serving the interests of stockholders. In this editorial, we briefly describe the major twists and turns in the stockholders-versus-stakeholders debate that make this statement so significant to management theory and practice. We then describe the implications of the statement for scholars and practicing managers. We end with a description of three specific research topics that require more research in light of this statement: firm boundaries, the nature of value creation systems, and theory regarding the destruction of stakeholder value.

TOP CEOs, FINANCIALIZATION, and the CREATION of the SUPER-RICH ECONOMY

This piece takes a close look at top CEOs in the United Kingdom. CEOs are not only among the ranks of today’s super-rich, they have played a vital part in the evolution of an economic system that supports the super-rich generally. As the article argues, they have done this in two key ways: first, by promoting to news media and policy makers a set of financialized free-market ideas about managing the economy, and second, by managing large companies as financial assets for the benefit of financiers and the super-rich. In both ways, they have encouraged financialization and the funneling of capital away from the real economy and ordinary employees, and upward toward the super-rich. The article is based on thirty interviews with top UK business leaders, including twenty Financial Times Stock Exchange 100 CEOs, as well as other demographic and qualitative data.

Heirs, corporate aristocrats and ‘Meritocrats’: the social space of top CEOs and Chairmen in India

Heirs, corporate aristocrats and ‘Meritocrats’: the social space of top CEOs and Chairmen in India

Mixed Ownership Structures and Firm Performance in China Listed Firms

China has achieved impressive economic growth since market reforms. The design of appropriate compensation structures is imperative so as to incentivize top managers, but little research has been done to examine the top management compensation structure in China. This study investigates how listed firms in China relate executive compensation to their firm performance and how such relationships are influenced by firm ownership structure. The results provide evidence showing strong link between compensation and performance varies across firms with different ownership structure. Private ownership enhances the link between firm performance and top CEOs compensation, while government ownership weakens executive pay-performance relation and thus makes the firms less effective in solving the agency problem between shareholders and management. It suggests enterprise reform in China will need to be supplemented by change in ownership structure in order to ensure fully success by transforming its State Owned Enterprises (SOEs) to corporations in the direction of converting state shares to public shares.

The Mismeasure of Mammon: Uses and Abuses of Executive Pay Data

On April 7, 2016, the Wall Street Journal ran an article headlined “CEO pay shrank most since financial crisis,” while on May 27, 2016, a similar New York Times story declared “Top CEO pay fell – yes, fell – in 2015.” Unfortunately, both the Journal and the Times mismeasured the actual take-home pay of each and every one of these CEOs in 2014 and 2015. The reason for this mismeasure is that both articles relied on “fair value” estimates of the stock-based pay of these CEOs as reported in the Summary Compensation Table of the definitive proxy statement (Form DEF 14A) that each publicly listed company files annually with the U.S. Securities and Exchange Commission (SEC). Yet the very same proxy statements also report the actual realized gains of these CEOs in the Option Exercises and Stock Vested Table. It is the realized gains on stock-based pay, not fair-value estimates, that enter into the total compensation that a CEO actually takes home and reports as income in his or her income-tax return.Moreover, including actual realized gains instead of estimated fair value of stock– based pay in the measure of total executive compensation can make a big difference. In 2015 the average total compensation of the 500 highest-paid executives named on corporate proxy statements based on actual realized gains was $32.6 million, with 82 percent coming from stock-based pay. But average total compensation of the 500 highest paid based on estimated fair value was $17.1 million, with 62 percent attributable to stock- based pay. The excess of total actual realized-gains compensation over total estimated fair-value compensation was greatest in those years when the stock market was booming.Why would the Wall Street Journal and the New York Times report estimates of executive pay when they could be reporting the CEOs’ actual pay? In this paper, we answer this question by explaining the origins of the “fair value” estimates of stock-based pay and how the obsession with these estimates by the SEC, relying on the business-run Financial Accounting Standards Board (FASB), has relegated to statistical obscurity executives’ readily available, accurate, and actual realized gains from stock-based pay. We use Standard & Poor’s ExecuComp database to document that a) stock-based pay, in the forms of realized gains from stock options and stock awards, dominates both the size of and the changes over time in the total compensation of the highest-paid senior executives; and b) the fair-value estimates of stock-based pay tend to understate, often substantially, the realized gains from stock-based pay that these executives actually receive.An irony is that even critics of excessive executive pay, most notably the AFL-CIO on its Executive Paywatch website, use the fair-value estimates when the actual CEO compensation numbers would reveal a much larger ratio of CEO pay to the earnings of the average worker. Indeed, as we discuss in the conclusion to this paper, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, this mismeasure of executive pay has become institutionalized in U.S. government policy in the SEC’s Pay Ratio Disclosure Rule, which beginning in 2017 requires every company to publish the ratio of CEO to median-worker pay. Under this rule, the SEC requires companies to use the fair-value measure of CEO pay. The Pay Ratio Disclosure Rule is supposed to provide the public with a company-level indicator of income inequality. Instead it will tend to underestimate inequality, substituting fictitious estimates for actual known amounts of income that CEOs put into their bank accounts and declare in their income-tax returns.

Um Novo “Espírito” do Capitalismo? A globalização e seu impacto na difusão do pensamento de gestão neoliberal na Alemanha e nas economias do Leste Asiático

A principal corrente da literatura sobre a globalização é bastante clara em seus pressupostos sobre como ela afeta o empreendimento industrial. Presume-se que ela dá origem a companhias transnacionais e, subsequentemente, a uma classe transnacional de executivos, que se valem do pensamento de gestão neoliberal para acelerar a transformação neoliberal da economia. Este artigo submete tais pressupostos enraizados a um forte teste empírico ao analisar quão transnacionais são as trajetórias de vida de 475 CEOs dos 100 maiores grupos industriais, tanto na Alemanha quanto na Coreia do Sul, Japão e China. Além disso, tendo realizado 148 entrevistas aprofundadas com os CEOs que ocupam os cargos mais altos, o artigo pergunta se há, de fato, um espírito neoliberal do capitalismo em funcionamento. Os resultados indicam que um pensamento de gestão neoliberal não está emergindo e que os altos executivos não são os operadores que levam a uma economia orientada para o mercado financeiro. Embora o pensamento de gestão neoliberal tenha tido algum impacto na alta gerência alemã, os vários sistemas empresariais no Leste Asiático indicam o predomínio de esquemas culturais mais nativos.

Taxing Top CEO Incomes

We use a firm-CEO assignment framework to model the market for CEO effective labor. In the model’s equilibrium, more talented CEOs match with and supply more effort to larger firms. Taxation of CEO incomes affects the equilibrium pricing of CEO effective labor and, hence, spills over and affects firm profits. Absent the ability to tax profits or a direct concern for firm owners, a standard prescription for high marginal income taxes emerges. However, given such an ability or concern, the optimal marginal tax rates are much lower. (JEL D31, H21, M12)

A New “Spirit” of Capitalism? - Globalization and its Impact on the Diffusion of Neoliberal Management Thinking in Germany and the East Asian Economies

Mainstream globalization literature is quite clear in its assumptions of how globalization affects industrial enterprise. It is presumed to give rise to transnational companies and subsequently, to a transnational class of managers, who use neoliberal management thinking to accelerate the neoliberal transformation of the economy. The article puts these engrained assumptions to strong empirical test by analysing how transnational the life courses of 475 CEOs of the Top 100 industrial company groups in Germany as well as in Korea, Japan, and China are. Furthermore, having carried out 148 in-depth interviews with Top CEOs, the article asks if in fact a neoliberal spirit of capitalism is at work. The findings indicate that neoliberal management thinking is not emerging and that top managers are not the switchmen leading towards a financial market-driven economy. Although neoliberal management thinking has had some impact on German top managers, the various business systems in East Asia indicate the dominance of more indigenous cultural frames.

Why Does Executive Greed Prevail in The United States and Canada but not in Japan?: The Pattern of Low CEO Pay and High Worker Welfare in Japanese Corporation

According to a list of the 200 most highly paid chief executives at the largest U.S. public companies, in 2012 Oracleâ–™s Lawrence J. Ellison was the best-paid CEO, earning $96.2 million as total annual compensation. He has received $1.8 billion over the 1993â–“2012 time period. The lowest-paid on the same list is General Motorsâ–™ D.F. Akerson, who earned $11.1 million. The average national pay for a non-supervisory U.S. worker was $51,200 in 2012, meaning that the average of the top CEOs made 354 times more than the average non-supervisory worker in 2012. Hunter Harrison, Canadian Pacific Railway Ltd., was the best-paid CEO in Canada for 2012 and received CDN $49.2 million in total annual compensation, significantly higher than Canadaâ–™s best-paid CEO in 2011, Magnaâ–™s F. Stronach, who received CDN $40.9 million. In 2011, the average Canadian annual salary was CDN $45,488 and Canadaâ–™s top fifty CEOs earned 235 times more than the average Canadian worker. These executive pay practices contrast with the growing inequality in Canada, recently illustrated with the finding that 40% of Indigenous children live in poverty. In contrast, Japanâ–™s highest-paid CEO is Nissan Motor Co.â–™s Carlos Ghosn, who earned 988 million yen ($10.1 million) in the year ending March 2013, barely changed from the previous year and only modestly improved from his US $9.5 million compensation in 2009. That does not even put him among the top 200 most highly paid U.S. company chiefs and the top twenty best-paid CEOs in Canada for 2012. Why are Japanese CEOs paid considerably less than their American or Canadian counterparts? This Article argues that the activism of long-term-oriented institutional investors such as banks and the tying of executive pay to worker welfare in the context of a culture of intolerance towards excessive executive compensation explain to a great extent the development of a pattern of low executive pay in Japan, despite the recent weakening of bank monitoring as a result of the adoption of a U.S. style of governance in some Japanese companies. The Japanese experience also demonstrates that lower executive compensation does not compromise firm performance and is a necessary condition to building a stakeholder-friendly corporation. For example, the CEO of Toyota (the worldâ–™s biggest automaker), Akio Toyoda, earned 184 million yen ($1.9 million) in 2012, a 35% increase from the previous year. He is the lowest-paid chief of the worldâ–™s five biggest automakers, and led Toyota to generate the highest return in 2012 among the top five global automakers. Toyotaâ–™s outlook for increasing profit prompted the automaker to approve the biggest bonus for workers in recent years. By contrast, Alan Mulally, Ford Motor Co.â–™s chief and the best paid among the top five, took home $21 million in 2012.

Focus: Abuse at the workplace: Deutsche Telekom in the United States

INTERNATIONAL union rights Page 3 Volume 20 Issue 4 2013 FOCUS ❐ RECOGNITION AND BARGAINING SYSTEMS Abuse at the Workplace: Deutsche Telekom in the United States The combative workplace recognition system in the US gives the employer a strong intervening role that can block workers’ efforts to establish a union TONY DALEY is a Research Economist at the Communications Workers of America (CWA). He coordinates the campaign for worker rights at T-Mobile US The Choices under US Labour Law US labour law establishes that a work unit can have only one employee representative. The law requires, however, that a majority of workers must choose their labour union and they must do so independently of influence from the employer . The law offers latitude in determining such a majority: the employer can accept individual statements of support from a majority of the workers, or the employer must accept a representation election supervised by the National Labour Relations Board (‘NLRB’). The company must not campaign for a union. The company, though, may campaign against the union. This gives management an inherent advantage since US unions have no guaranteed access to work premises. Instead, union representatives must meet with workers off-site and outside work hours. Inside the facility, workers may marshal arguments for collective representation during non-work time. In contrast, the employer is free to use work time to argue that employees should reject the union. US companies’ approach to workers’ freedom of association is varied. AT&T, the largest telecom company in the US, accepts union authorisation cards as a measure of support, using a third party (American Arbitration Association) to verify totals. When workers start signing up for representation, the company remains neutral and even trains lower level managers to refrain from comment about the organising effort. The Communications Workers of America (‘CWA’) represents 132,000 workers at AT&T of which 44,000 work for AT&T Mobility, the wireless provider. T-Mobile US (‘TMUS’) represents the other extreme. Controlled by the German telecom giant Deutsche Telekom, TMUS takes the position that it can only recognise a majority of workers demanding a union if an election takes place. It is unabashed in communicating its anti-union message, taking full advantage of the law’s provisions in terms of employer speech. Employees are forced to listen to managers harangue the labour movement and the CWA. Elections are plagued with management’s consistent badgering of employees to vote against the union. When pressed on worker rights, DT claims that it respects the law of countries in which it operates , but numerous complaints from the NLRB suggest otherwise. DT argues that it can only recognise a union representing a majority of workers in the US if there is an election. Managers retain ‘free speech’ rights to communicate actively and repeatedly to workers that the company opposes organising and union recognition. Corporate speech – in contrast to severely restricted employee speech – is the wedge used F or the last twenty-five years, income in the US has shifted to the wealthiest Americans. Workers’ wages have stagnated while productivity (output per hour of work) has increased by 25 percent. Median weekly earnings between 2004 and 2013 were down 1 percent in real terms. This divergent trend between wages and productivity means that working people are not reaping the gains of economic growth in the United States. In real terms, the national minimum wage is worth 23 percent less than in 1968. 46.5 million people live in poverty in the US, bringing the official poverty rate to 15 percent. The Economic Policy Institute found that the annual compensation of top CEOs has risen 835 percent since 1978 while private sector pay has risen 5 percent. The assault on labour unions drives this inequality. The pervasive use of union avoidance consultants has discouraged workers from exercising their rights. The percentage of workers covered by a collective bargaining agreement has shrunk to under 7 percent in the private sector. The labour movement’s political force is incapable of moderating the zeal of the Right. The National Labor Relations Act of 1935 (‘NLRA’) – the foundation of American labour law – states that it is public policy to encourage ‘the exercise by workers of full freedom of...

Why Does Executive Greed Prevail in the United States and Canada but Not in Japan? The Pattern of Low CEO Pay and High Worker Welfare in Japanese Corporations

According to a list of the 200 most highly-paid chief executives at the largest U.S. public companies in 2012 Oracle’s Lawrence J. Ellison remained the best-paid CEO, earning $96.2 million as total annual compensation.. He has received $1.8 billion over the past twenty years. The lowest-paid on the same list is General Motors’ D.F. Akerson who earned $11.1 million. The average national pay for a non-supervisory U.S. worker was $51,200 last year, meaning that the average of the top CEOs made 354 times more than the average worker in 2012. Hunter Harrison, Canadian Pacific Railway Ltd., was the best-paid CEO in Canada for 2012 and received CND $49.2 million as total annual compensation, significantly higher than Canada's 2011 best-paid CEO, Magna’s F. Stronach, who received CND $40.9 million. In 2011, the average Canadian annual salary was CND $45,488 and Canada’s top fifty CEOs earned 235 times more than the average Canadian. These executive pay practices contrast with the growing inequality in Canada, recently illustrated with the finding that 40% of Indigenous children live in poverty. In contrast, Japan’s highest paid CEO is Nissan Motor Co.’s Carlos Ghosn who earned 988 million yen (US$10.1 million) in the year ended March 2013, little changed from the previous year and modestly improved from his US$9.5 million compensation for 2009. That does not even put him among the top 200 most highly-paid U.S. company chiefs and the top twenty best-paid CEOs in Canada for 2012. Why are Japanese CEOs paid considerably less than their American or Canadian counterparts? This essay argues that the activism of long-term-oriented institutional investors such as banks and the tying of executive pay to worker welfare in the context of a culture of intolerance towards excessive executive compensation explain to a great extent the development of a pattern of low executive pay in Japan, despite the recent weakening of bank monitoring as a result of the adoption of a U.S. style of governance in some Japanese companies. The Japanese experience also demonstrates that lower executive compensation does not compromise firm performance and is a necessary condition to building a stakeholder-friendly corporation. For example, the CEO of Toyota (the world’s biggest automaker), Akio Toyoda, earned 184 million yen (US$1.9 million) in 2012, a 35% increase from the previous year. He is the lowest-paid chief of the world’s five biggest automakers, and led Toyota to generate the highest return last year among the top five global automakers. Toyota’s outlook for increasing profit prompted the automaker to approve the biggest bonus for workers in recent years. By contrast, Alan Mulally, Ford Motor’s chief and the best paid among the top five, took home $21 million in 2012.

A Very Economic Elite: The Case of the Danish Top CEOs

Although the business elites in western societies have a very privileged social background in common, there are substantial differences in the reproduction mechanisms and social trajectories leading to a position within this elite group. These differences are explored by comparing the career paths of the top 100 CEOs in Britain, France, Germany and Denmark. In France and Britain, this reproduction is mediated through degrees from elite universities. In Germany, the principle of admission is the incorporated cultural capital acquired through an exclusive bourgeois origin combined with any university degree. Elite universities also hold little importance for Danish top CEOs, partly due to the institutions’ historic decline; instead, reproduction is mediated through time spent in the economic field, placing the case of the Danish CEOs between that of their British and German counterparts. Specific trajectories of Danish executives, in particular sales people, are identified using Multiple Correspondence Analysis and cluster analysis.