Which CEO Characteristics and Abilities Matter?





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    • Kaplan is with University of Chicago Booth School of Business and NBER. Klebanov is with Ziff Brothers Investments. Sorensen is with Columbia Business School and NBER. We thank Geoff Smart and Randy Street of ghSMART for providing the data and for helpful discussions and comments. We thank David Altman, Malcolm Baker, Carola Frydman, Cam Harvey, John Graham, Mike Jensen, Leslie Pratch, David Robinson, David Yermack, two anonymous referees, and seminar participants at the 2008 AFA Meetings, Duke, Harvard Business School and Economics Department, Kellogg, LSE, NBER Corporate Finance Conference, NBER Private Equity Conference, NBER Summer Institute, SIFR Conference 2007, and Wharton for helpful comments. We also thank Xu Da, Sol Garger, Cristina Iftimie, Ingrid Tang, Phoebe Tse, and Jaclyn Yamada for research assistance. This research has been supported by the Lynde and Harry Bradley Foundation and the Olin Foundation through grants to the Stigler Center for the Study of the Economy and the State, the Center for Research in Security Prices, the Kauffman Foundation, the Booth Initiative on Global Markets, and Kathryn Gould.


We exploit a unique data set to study individual characteristics of CEO candidates for companies involved in buyout and venture capital transactions and relate these characteristics to subsequent corporate performance. CEO candidates vary along two primary dimensions: one that captures general ability and another that contrasts communication and interpersonal skills with execution skills. We find that subsequent performance is positively related to general ability and execution skills. The findings expand our view of CEO characteristics and types relative to previous studies.