The chief executive officer (CEO) ranks as the highest corporate executive in charge of overseeing the entire operation of an organization. The role of CEO typically reports to a board of directors that is elected by shareholders or others with a financial stake in the company’s performance. CEOs may also act as President, hence the designation President and CEO. Whereas CEO implies a more broad and visionary role, President implies more direct involvement with daily operations.
CEO Job Responsibilities
The primary responsibility of the CEO is to direct the company, inside and out, to align with his or her vision for the company’s future. This includes guiding other executives and high level officers along a main objective and working to increase business outside of the company. Secondary responsibilities are often determined by the size of the company and the business sector it represents. The CEO is required to balance objectives internally and externally in order to strengthen and sustain the company.
CEOs are often required to represent their company. The position often comes with a high level of public visibility. Therefore, they are typically required to attend important events such as public meetings, international conferences, and public events.
Budgeting is often another area where CEOs may be responsible or at least provide input. In larger organizations, a Chief Financial Officer (CFO) typically handles the financially-related aspects of the company. In that case, the CEO may work closely with the CFO to prepare the budget. CEOs commonly analyze the risks involved before making any major purchase or investment and advise or report to the board as to the potential for return on the investment.
CEO Training and Education Requirements
There is no predetermined course of study for CEOs. Formal education varies as much as the responsibilities do. However, many CEOs have at minimum a bachelor’s degree and significant experience. Many CEOs are chosen from within the organization due to experience in their respective industries. When CEOs are chosen from outside the company, they are usually required to have extensive experience in a related industry.
One important quality CEOs must possess is the ability to work with people and resolve or prevent conflict. The position often requires highly refined interpersonal skills as well as the ability to communicate publicly. Public speaking is a skill commonly found in CEOs. CEOs must also be able to take in a large amount of information and develop a big-picture perspective in order to make precise and strategic decisions about the direction of the company.
Another important observation is that many CEOs achieved the position from entrepreneurship. That means they originally started a company that grew large enough from inception to give the founder the position of CEO due to size, stability, or going public. For example, the world’s longest running CEO, Milton Pierce, founded a security company, Guardian Alarm, as a young teenager in 1930.
CEO Salary and Wages
Just like a CEO’s position is the highest in the organization, the position also comes with some of the highest salaries. It’s a common focus of major news organizations to list some of the highest paid CEOs in the world. For major corporations, salaries can reach up into the millions of dollars annually. However, not all CEOs are paid that high. Median salaries in the United States are around $158,000. The salary range varies widely, though, based on the size of the company, the level of responsibility, and the industry.*
*According to the BLS, http://www.bls.gov/oco/
CEOs are often awarded significant benefits packages including severance pay (the golden parachute). Additionally, CEOs often enjoy cash bonuses, stock options, and other financial benefits based on the performance of the company. Other perks of the job may include use of corporate transportation such as company cars, helicopters, and airplanes. They may also enjoy use of special facilities such as executive dining rooms and bathrooms. Health benefits are also extensive and may include such perks as company-paid physical exams and insurance premiums.
Although there is no professional certification for CEOs, they may advance to the position based on participation in corporate training programs that give a more extensive knowledge of the company’s policies and operations. Attending seminars and conferences for respective industries may also expand a potential candidate’s awareness of timely issues as well as build a useful network of professional contacts. The company may even promote a more structured tier of executive development programs in order to pool resources from within.
CEO Professional Associations
CEOs may often become members of many associations based on the strategic advancement of the company’s goals and objectives. However, there is no one single association for CEOs. CEOs may also join more specialized executive associations. The Women President’s Organization (WPO), for example, is a female-oriented peer-advisory group that meets on a monthly basis to trade experiences and expertise about the common challenges faced and provide solutions for each other. Vistage International is the largest association with exclusive CEO membership. Most members participate in meetings with local chapters at least 10 hours a month to discuss the most difficult issues and develop plans of action.