How Many Top CEOs Have an MBA?

A new study of the 100 best-performing CEOs in the world in the latest edition of Harvard Business Review hasn’t quite laid that question to rest, but it has highlighted what it doesn’t take: an MBA.

Of the 100 CEOs on the list, only 29 have MBAs, according to the study’s author, Adi Ignatius, HBR’s editor-in-chief. If you’re a fan of the degree, that’s the bad news. The good news is that six of the 10 top CEOs do have MBAs: No. 2 John Martin of Gilead Science, No. 3 John Chambers of Cisco Systems, No. 4 David Pyott of Allergan, No. 5 David Simon of Simon Property Group, No. 7 Hugh Grant of Monsanto, and No. 8 J. Michael Pearson of Valeant Pharmaceuticals.

The other thing you don’t need to rise up the ranks of the top CEOs in the land is an MBA from a top school. Of course, it doesn’t hurt – of the 29 MBAs on the list there are seven from Harvard Business School, two each from Stanford and Columbia, and one each from Dartmouth, Northwestern, INSEAD, and London Business School. But about half the top performing executives came from mid-tier schools, including Golden Gate University, Indiana University, Pepperdine, and the University of Memphis.

Ignatius described the MBA as one of “two preferred pathways” to top CEO success, the other being engineering. CEOs with engineering degrees accounted for 24 of the top CEOs, including the guy at the top of the list, Amazon’s Jeffrey Bezos.

Pay and performance do not go hand-in-hand

The HBR ranking is based on the increase in total shareholder return and market capitalization over the CEO’s entire career with the company.  And really you couldn’t go wrong with any of these executives. Average shareholder return for the top 50 was 1,350%, or 26.2% a year.

Still, it’s worth noting that pay and performance did not always go hand-in-hand. The highest-paid executive on the list, Disney’s Bob Iger, came in at No. 60, with a total pay package of US$34.3 million, which means there were 59 other executives with better performance and worse pay.

However, 13 CEOs actually earned more than Iger, but didn’t have the kind of performance that would land them on the list. At the top of the highest-paid list: Charif Souki of US gas developer Cheniere Energy, whose 2013 pay totaled US$141.9 million, more than four times Iger’s compensation.

The question of whether an MBA confers any kind of performance benefit on CEOs is one that many researchers have attempted to tackle, with mixed results. In 2009, a team of researchers from INSEAD found that companies run by CEOs with MBAs delivered better long-term shareholder value. But a year later a new study by a team of researchers from the

University of Colorado, the University of New Hampshire, and Georgia State University came to the opposite conclusion.

The HBR study, unfortunately, doesn’t settle the issue either way. Clearly, MBAs bring something to the table, but quantifying it may be impossible. It may be that an MBA prepares executives for some jobs, but that CEO—which requires high-level leaderships skills, vision, and an appetite for risk verging on the ravenous—just isn’t one of them.