The 4 paths for becoming CEO of a S&P 500 company

The S&P 500 represents a group of big companies across various industries meeting various needs and doing so at a large scale. The CEO of each company has a huge impact on the company’s direction and culture and as a result on the world it serves.

So how do you think the CEOs of these companies got to their current role? For example, what roles did they work in at any stage of their career? A bunch must have management consulting in there right? There’s the responsibility bump that a stint supposedly gets you. And banking must be on there of course? And what share of these CEOs went to Ivy league schools? Over 50%?

The answers will surprise you.

In 2008, executive search firm Spencer Stuart reviewed this data in a paper titled Route to the Top. Here are some of their most interesting findings.

First, the paper found that the fraction of S&P 500 CEOs who received their undergraduate degree from an Ivy League university is 10%. The two most common undergraduate universities attended, with 13 CEOs each, are Harvard and the University of Wisconsin.

Second, the following roles showed up in less than 10% of CEO paths at any stage: academia (1%), banking (3%), consulting (4%), law (7%), and planning & development (9%).

Third, the following summary table shows the 4 roles that appeared most often in their paths.

Functions That CEOs of S&P 500 Companies In 2008 Had Worked In*

Marketing or sales 41%
Operations 42%
Finance 31%
Engineering 11%

* Percentages do not add up to 100% due to CEOs who worked in more than one function in this list or who did not work in any function in this list during his/her career. [Source: Spencer Stuart]

I draw three conclusions from this data:

First, attending an Ivy League university in the 1980s was not essential to eventually becoming a CEO. This may seem obvious, but it bears mentioning given the brand of the Ivy League. To determine the advantage it did confer would require looking at cohorts of equal ability who did and did not go to Ivy League universities. My hunch is that the advantage of going to an Ivy League school (or to the “Ivy Plus”[1]) has increased over time, less so because of their educational value but more so because of what seems like greater sorting of ambitious peers, made possible by the accumulation of wealth in more households than ever before in history[2] (albeit still smaller than ideal) and more generous financial aid packages.

Second, banking, consulting, a law degree, or a graduate research degree were not productive ways of spending time in the 1980s[3] if you eventually wanted to have a leadership role in a large operating company. There are of course individuals who are exceptions to this, lots of them, some that I know personally. But in general, you would have been swimming against the tide. Of course, one obvious reason to pursue banking, consulting, law, or graduate research would have been to pursue them as careers in and of themselves.

Third, the four roles that dominated their paths (marketing and sales, engineering, operations, and finance) are not surprising since they make up the primary objectives of most businesses. I’ll dig into that point in more detail in a future post.

What do you make of the data? What’s surprising and what did you expect? Fire away in the comments or by email.

[1] This informal definition usually includes schools like MIT, Stanford, U Chicago, Duke, and others.

[2] Nielsen has this to say about the “Mass Affluent” demographic: “The last two decades have spawned another class of wealth whose members aren’t typically found eating caviar or summering in Europe. This new crop of wealthy Americans was raised in middle-class suburbs and benefited from college educations and years of economic prosperity during the bull market of the 1990s. Today, they’re the empty-nesters.”

[3] The average and median age of this group of CEOs is around 55 so their education and early careers spanned the late 1970s and 1980s.



  1. Praveen Ghanta

    This post doesn’t clearly define why one would want to become CEO of a Fortune 500 firm. I would argue that if compensation is the goal, recent trends in inequality have made finance and tech better places to be than the long march up the corporate ladder. Of course hitting the Instagram-style tech lottery cannot, by definition, happen to everyone – but over the last decade the hedge-fund guys have been eating CEOs’ lunch when it comes to compensation. Why else did poor Rajat Gupta, he of the 100M net worth, want so badly into the club?

    It’s unfortunate and highly distorting that so many of our best and brightest go to the casino rather than do real work. I feel this even personally, as the markets can often provide higher returns (or the seduction of higher returns) for less effort than the hard work required to make a startup succeed. How many bright minds do we know that have been seduced by “easy” money in finance?

    At least the tech kids are kind of doing something, although I’d argue that many of them are vying for the “easy” Instagram or Tumblr money rather than trying to truly innovate. Maybe I’m just being a curmudgeonly engineer when I say this – but to me the increasing returns to eye-candy (great UX and a landgrab for social eyeballs) doesn’t appear to be real innovation – it feels more like a Silicon Valley version of what’s been happening on Wall Street.

    • Vivek

      I was using CEO of S&P 500 as illustrative for a significant leadership role in a company in any industry, where you have the opportunity to address a need at scale, both having an impact and being well compensated in the process. The later piece specifically on compensation shows that leadership / management roles make up a much bigger share of the “One Percent” by income than finance in 2005. I think your comment gets at why finance figures so vividly in most people’s mind.

      On tech, the majority of tech investments are in B2B companies but these don’t get nearly as well covered by the press, as I described in What you read is mostly wrong. They are also addressing problems that are not familiar when you graduate from college as described in another piece.

  2. Pingback: There are only 4 types of roles in a company | Vivek Mohta
  3. Pingback: Want to be successful? Learn to help others. | Vivek Mohta

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