According to the U.S Bureau of Labor Statistics, there were 263,200 Chief Executive Officers (CEOs) in America in 2018. This number represents a small portion of the overall workforce. However, in 2012, the typical CEO of a large U.S corporation received an average of $12.3 million in compensation, which is 354 times more than what the average U.S. worker earns in a year.
Not all CEOs earn as much as these multi-millionaire executives, but they are generally among the highest-paid employees in any given company or organization.
Though requirements vary depending on the industry and size of the company, CEOs need specific qualities, experience, skills, and qualifications to reach the top of the corporate workforce.
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What Does a CEO Do?
The CEO is the person in charge of planning and implementing the high-level strategies and direction of a company. They are responsible for all the departments and components of the company.
Making Important Decisions
As a top executive in a company, they work with other decision-makers, such as the company’s board members and department heads, to plan for the future, define and address weaknesses and underperformance, and make structural and operational changes that benefit the company.
A CEO also needs to be aware of a variety of factors, such as competition from other players in the industry, legal and regulatory matters affecting company operations, and new developments in the economy.
All CEOs have leadership duties and decision-making responsibilities. However, some of the other details of a top executive’s role can vary depending on the size of the company, their operational needs, goals, industry, and current performance.
A CEO is not only responsible for creating an overall mission and direction for the company. Some executives may foster an existing mission or company culture, while others may be responsible for making changes in these areas. All CEOs need to communicate the company’s goals and mission to employees and ensure that these ideas inform operations in the company.
As the head of the company, the CEO is ultimately responsible for deciding when the company has achieved its goals or mission.
The CEO and the C-Suite
A CEO doesn’t work alone. Part of their job involves getting guidance from board members, managers, and other executives. They may also need to explain decisions to board members and shareholders. One of a CEO’s more important duties is making sure that shareholders and ownership remain happy with the performance and direction of the company.
Often, the CEO is the face of a company at meetings, conferences, events, and other public gatherings. This part of the job could involve meeting and hosting VIPs or potential shareholders, giving speeches, or appearing at public or private events as a representative of the company.
Management responsibilities of a CEO vary depending on the size of a company. In a smaller company, a CEO may work directly with employees or lower-level management. In a large company, a top executive works with and delegates tasks to other executives such as a the CFO (chief financial officer), COO (chief operations officer), or CTO (chief technical officer).
In a small business, the CEO may also perform the duties of a CFO or COO in addition to acting as the head of the company.
Average CEO Salary
According to the Bureau of Labor Statistics, the median salary for CEOs is $189,600. On average, salaries can range from $68,360 to $208,000. However, some CEOs at large or successful companies can make much more than that. Payment varies depending on education, experience, location, and the industry in which the company operates.
The compensation packages of top executives often go beyond salary. Many also receive equity in the company or stock options that they can exercise at any time. Performance bonuses and other rewards may also be a part of a CEO’s contract.
What Do You Need to Become a CEO?
The path to becoming a CEO is not well-defined. However, most companies prefer to hire top executives who have extensive experience in their industry, leadership and decision-making skills, and a track-record of success.
Most CEOs have at least a bachelor’s degree, and many companies prefer executives with at least a master’s degree in business administration (MBA). Most companies expect executives to have academic qualifications in business, finance, or economics, though some may also hire executives who have a degree that is relevant to the company’s industry.
Even if it is not a requirement for a company, a master’s degree could help a potential CEO stand out during the hiring process. Loans and other forms of financial aid can help would-be executives pay for graduate school even if they are not pursuing a degree directly after their undergraduate studies.
However, there are examples of CEOs, such as Facebook’s Mark Zuckerberg, who do not have a college degree. Though most CEOs pursue academic qualifications, taking out expensive student loans to attend a famous college or graduate school may not be necessary for aspiring CEOs.
All CEOs need management-level experience. Though there is no time frame for ascending to top executive position, many companies prefer to promote executives from within their ranks. You may start this career path in an entry-level management position and earn promotion to a top executive position, such as COO or CFO, before ascending to a CEO position. This process may be quicker in a smaller company.
Another option for aspiring CEOs is to get an entry-level job or hourly wage job at a company during their academic career. They can then gain experience in their chosen industry while still in school.
CEO Job Outlook
Employment for top executives, including CEOs, should grow by 6% between 2018 and 2028. This projection, by the BLS, puts the growth in demand for CEOs on par with the increase in demand for all types of professional positions.
The most significant driver for executive employment growth will be the formation of new organizations and the expansion of existing ones.
Should I Become a CEO?
You may succeed as a CEO if you have strong leadership skills, the confidence to make high-level decisions, and the ability to communicate with others effectively. CEOs typically have personality traits that make them effective leaders. For example, they need to be able to foster relationships with other executives and also with shareholders.
Because a CEO has to deal with problems and pressures daily, this position can carry a lot of stress. Such stresses may be a significant negative for this career. CEOs need to learn how to deal with this negative aspect to thrive in their position.
Also, rising to the level of CEO takes commitment. You need to be willing to work in the industry and gain experience. It can take years to reach an executive-level position. Since there isn’t a well-defined path to a CEO job, there is no guarantee you will ever reach the position. However, gaining education and experience and developing leadership skills will give you the best chance at earning a promotion to CEO.
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