Salary

Chief Executive Officer Salary: Education Responsibilities and Skills

 

 

Chief Executive Officer Salary

 

 

In the United States, the average income for a chief executive officer is $115,193 per year, plus $25,000 in profit sharing. A company’s highest-ranking executive is the chief executive officer (CEO). A chief executive officer’s key tasks, in general, are making major corporate decisions, managing a company’s overall operations and resources, and serving as the principal point of communication between the board of directors and corporate operations. In many circumstances, the chief executive officer is the company’s public face. 

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Education 

Unless you’re a founder, your odds of climbing the corporate ladder without a degree are little to none. A little more than half of Fortune 100 CEOs have a business, economics, or accounting degree, while 27% studied engineering or science, and 14% studied law. Fortunately, there’s no need to invest in a top-tier institution at this point. Alan Mulally, for example, earned his bachelor’s degree from the University of Kansas. Randall L. Stephenson of AT&T is a University of Central Oklahoma graduate. Malcom Gladwell argues in his recent book that persons who attend a lower-ranked school do better in life than those who attend a higher-ranked institution. He claims that it permits them to keep their self-assurance, whereas even bright students can suffer in courses with a high percentage of academic overachievers. 

For MBAs, however, grades are less important than the school’s brand and the networks built. Nearly 40% of Fortune 100 CEOs have an MBA, with 60% of them attending an excellent school. Harvard is still the place to go if you have the opportunity. In 2012, 40 CEOs from the Fortune 500 had earned an MBA from the world’s most prestigious business school.

What College Courses Do You Need to Be a CEO? 

Business Fundamentals 

Every CEO must understand the ins and outs of running a company. Accounting, Marketing, Finance, and Operations are required core business studies for every student aspiring to be a CEO and operate a successful organization. Students learn about marketing research methods, consumer behavior, business theories, final decision theories, and operational strategies in these classes, which serve as a basis for their executive career path. 

Management Training 

CEOs that are successful must be able to efficiently handle all parts of their companies’ operations. Students can refine their skills in managing people, making management decisions, and developing an effective management strategy by taking courses like Managerial Decision Making, Managerial Accounting, Network Structures of Effective Management, and Competitive Strategy. 

Leadership Training 

The LEAD (Leadership Effectiveness And Development) curriculum is used in most MBA schools to mold students into future business leaders. Leadership classes, regardless of the type of curriculum used, aim to improve students’ abilities to work in groups and with peers, study successful leaders from the past, and establish a leadership model for future commercial initiatives. 

Communication classes

Despite the fact that most communications courses are unrelated to business degrees, excellent communication is one of the most crucial talents a CEO can possess. Courses in communications, public speaking, journalism, and business writing help students improve their understanding and mastery of the English language, as well as their ability to communicate effectively in both oral and written forms. These abilities help the CEO speak in front of groups, communicate with employees, investors, and partners, and successfully explain her strategic vision.

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Obtain Relevant Work Experience in Order to Prepare to Become a CEO 

How long does it take for a student to become a CEO? In addition to the time it takes to get a 4-year bachelor’s degree and/or a 2-year master’s degree, you must consider the requisite quantity of job experience. Most CEO positions necessitate at least 5 years of relevant work experience. 

Chief executive officers require a great deal of managerial expertise, which most people earn through working their way up through their company or in positions with other companies. Some companies may provide internal training or development programs that might assist individuals in advancing their careers. 

Earning a Professional Certification for CEOs is a great way to advance your career. 

Although it is not always needed, some CEOs are expected to acquire a professional certification in a certain field of management, based on their work responsibilities and the needs of their firm. Aspiring CEOs may also gain certificates that will assist them in moving up the corporate ladder. 

MBA degrees are required for becoming a CEO. 

This is a list of MBA programs for future CEOs. The list is divided into three sublists, each with its own set of requirements for school inclusion. The first is a list of the 10 colleges with the most CEOs now working for Fortune 500 companies. Second, according to U.S. News & World Report, the top online MBA programs in the United States. The third section contains a list of the most affordable AACSB-accredited MBA programs. The goal of each list is to provide a resource that can assist students in various situations in making the best decision for them while taking those conditions into account. 

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According to Forbes, 40 of the top 100 highest-paid CEOs have an MBA. Among that restricted group, this is the largest concentration of any single degree. Many persons who have reached the pinnacle of corporate success credit their MBA with advancing them into executive roles. Some people, on the other hand, distinguish between those who want to work their way up the corporate ladder and those who want to establish their own business or work for a startup. Everyone seems to agree that the MBA isn’t a magic bullet in and of itself. To reach the top of your field, you’ll need devotion, hard effort, creativity, and talent.

The Best MBA Programs for Tomorrow’s CEOs 

Dartmouth College is located in Hanover, New Hampshire. 

Dartmouth is the ivy league’s smallest school. Dartmouth’s Tuck Business School endeavors to give MBA students individualized attention and access to a wealth of tools. Collaboration and leadership, respect and responsibility, and ethics and stewardship are three of the school’s core values. 

Columbia University is a private university in New York City 

Columbia University students are in the midst of a perfect storm for success. Columbia University is an Ivy League university in the center of New York City, the world’s financial capital. Columbia University’s MBA program aims to foster students’ desire for creativity and innovation. 

University of Michigan is located in Ann Arbor, Michigan. 

While the state institutions on this list rival several Ivy League schools in terms of the number of Fortune 500 CEOs, it is clear that they also rival those schools in terms of cost. Before graduation, 85 percent of UMich Ross School of Business MBA graduates accept job offers. 

Indiana University is a public research university in Bloomington 

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Indiana University has more Fortune 500 CEOs among its MBA alumni than any other public university, at six. The Kelley School of Business fosters a collaborative learning environment. Whether you’re working with your peers, the academy director, or a career counselor, the program is structured to take advantage of collaboration on numerous levels. 

Northwestern University is a private university in Evanston, 

Northwestern University’s Kellogg School of Business is one of the most prestigious in the world. Kellogg is ranked #6 for graduate business programs by U.S. News and World Report, while being just outside the top ten colleges in the United States. Students at the school are encouraged to be supportive, collaborative, imaginative, and brave. 

Stanford University is a prestigious university in California. 

Stanford is the first university in the world to have a double digit number of alumni serving as CEOs of Fortune 500 firms. Stanford places a strong emphasis on entrepreneurship. This is one of the greatest colleges for students who want to make a difference in the world. According to a new study, Stanford alumni have a global economic effect of roughly $3 trillion and have produced 5.4 million employment.

The CEO’s Roles and Responsibilities 

The CEO is responsible for managing the formulation and execution of long-term strategy with the goal of generating shareholder value, in addition to the general performance of an organization or firm. 

The functions and responsibilities of a CEO differ from one firm to the next, and are typically determined by the company’s organizational structure and/or size. In smaller businesses, the CEO has a more hands-on role, making lower-level business decisions, for example (e.g., hiring of staff). He or she usually solely handles high-level business strategy and important company decisions in larger companies. Managers or departments are in charge of other responsibilities. 

The functions and responsibilities of a chief executive officer are not standardized. A CEO’s customary responsibilities, duties, and job description include: 

Communicating with shareholders, government agencies, and the general public on behalf of the company 

Leading the company’s short- and long-term strategy development.

Creating and implementing the vision and goal of the company or organization.

Assessing the work of the company’s other executive leaders, such as directors, vice presidents, and presidents.

Maintaining a thorough understanding of the competitive market landscape, expansion potential, and industry developments, among other things. 

Assuring that the organization maintains a high level of social responsibility in all of its operations 

Assessing the company’s risks and ensuring that they are tracked and mitigated 

Establishing strategic objectives and ensuring that they are measurable and definable 

The CEO’s role in the hiring and retention of employees 

The CEO is also in charge of hiring the executives who make up the executive team, as well as firing those who do not meet the CEO’s expectations. These other chief officers are in charge of providing functional advice to the CEO, such as the chief financial officer’s (CFO) financial advice, the chief marketing officer’s (CMO) marketing counsel, and so on. These executives assist the CEO in developing strategy and putting policies and directions in place. These executives, in turn, are in charge of overseeing their functional areas on behalf of the CEO. 

The CEO is also in charge of establishing the company’s culture by assisting in the development of the attitudes, behaviors, and values that he or she wants the company’s employees to reflect, then modeling those stances and ensuring that other executives, as well as the HR department, support them. 

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The board of directors of an organization normally hires and reviews the CEO; it also establishes salary and has the authority to fire the CEO if it is dissatisfied with the CEO’s performance. The CEO, who may also serve as president or chairman of the board of directors, is supposed to keep the board informed on a frequent basis. 

Choosing a career path 

Outsiders find it difficult to adapt and manage large organizations since they are complex ecosystems. The board members of Fortune 100 companies are well aware of this dynamic, with domestic candidates being preferred in 79 percent of cases. In the long-living firms I analyzed, just 11 percent of the 222 CEOs were outsiders. The figure was much lower in the most successful long-lived businesses: 3%. 

This does not imply that CEOs have worked for the same company their whole careers. Some people work for a few years at a large consulting firm. According to a 2008 USA Today poll, the chances of a McKinsey consultant becoming the CEO of a public business are 1 in 690. James P. Gorman, a senior partner in McKinsey’s financial services group before transferring to Merrill Lynch and later Morgan Stanley, was a senior partner in McKinsey’s financial services practice. However, operational experience is essential, as a direct transition from consulting to CEO is an unusual occurrence. In fact, you’re more likely to leave a law firm after demonstrating your worth by providing legal services to the firm. 

Before being offered the top job, most future CEOs move into significant operational jobs, generally leading the largest division or the most important overseas firm. Three-quarters of Fortune 100 CEOs come from the operations side of the business. Adam Kleinbaum, a Dartmouth College lecturer, recently wrote an article about the drawbacks of such a career path. Moving through the core business levels results in narrow interpersonal networks and less opportunities to connect with people from diverse parts of the firm. And this is important since the CEO’s job may be a lonely one, and having trustworthy friends and supporters you can consult to find out what’s really going on on the ground level can assist. 

Finance is an alternate career route, with 32 percent of Fortune 100 CEOs having previously held the position of CFO. These jobs are usually even more restricted, posing the risk of viewing the entire business through the lens of numbers. CFOs, on the other hand, are often the only ones with significant experience in interacting with shareholders, according to Will Moynahan of executive recruitment firm Heidrick & Struggles. Being able to communicate effectively in high finance with a variety of external stakeholders is a valuable skill for public business CEOs. 

Future CEOs will face a plethora of unanticipated concerns and challenges as the globe becomes increasingly global and linked. Boards are aware of this and will value track records that demonstrate a diverse range of experience. This isn’t to say that someone with a strong finance or operations background won’t be considered, but adding something different to the mix is always beneficial. Working as a consultant for a few years comes to mind immediately. Ginni Rometty of IBM is a fantastic example of someone who has held a variety of positions. She began her career as a systems engineer at General Motors before joining IBM. She became head of marketing and strategy before obtaining the top role after a time in IBM consulting, where she drove the acquisition of PricewaterhouseCoopers.

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