According to studies referenced in The 5X CEO, CEOs are responsible for 15% to 40% of a company’s market value. This range is derived from the following data points and sources.
✅ CEO characteristics can explain up to 30% of a firm’s performance variance. [1]
✅ CEO is responsible for 20%-40% of company performance relative to peers. [2]
✅ Particularly for large firms, the range cited is between 15% and 35%. [3]
[1] “Which CEO Characteristics and Abilities Matter?” U.S. National Bureau of Economic Research, July 2008, https://www.nber.org/papers/w14195
[2] “CEO Excellence: How Do Leaders Assess Their Own Performance,” McKinsey, Feb. 13, 2024, https://www.mckinsey.com/featured-insights/future-of-asia/ceo-excellence-how-do-leaders-assess-their-own-performance
[3] Mikko Rönkkö, Pardeep Maheshwaree, and Jens Schmidt, “The CEO Effect and Performance Variation over Time,” The Leadership Quarterly 34, no. 5 (October 2023): Article 101733, https://doi.org/10.1016/j.leaqua.2023.101733
Note: Source [2] above differs from the book claiming, “Our research indicates that as much as 45 percent of a company’s performance can be attributed to the CEO’s influence.”