An MBA isn’t required to get admission. But it sure helps you get a better seat.
That’s especially true of the corner office. To land the big gig, it takes a mix of experience, skills, networking, and political savvy. Make no mistake: Aspiring CEOs get a head start with an MBA. It is a stamp of approval that shows the elders that they’re worth the investment. Beyond that, it is track record and moxie that takes them further.
HARVARD TOPS THE LIST – AND IT’S NOT EVEN CLOSE
Of course, some MBA programs are better at developing CEOs than others. Harvard Business School is a case in point. Recently, the Financial Times reported that 22 HBS alums are now CEOs of 500 largest firms in the FT 500. To put that number in perspective, you would need to combine the CEOs who earned MBAs at INSEAD, Stanford, and Wharton on that list to equal HBS’ number. Talk about dominance!
However, the news isn’t all upbeat in Cambridge. Last year, 28 CEOs listed HBS as their alma mater, meaning Harvard lost nearly a quarter of its executive firepower over the past year. Those HBS-trained CEOs who left the stage include luminaries like Procter & Gamble’s A.G. Lafley, Boeing’s Jim McNerney, Syngenta’s Michael Mack, and Kraft Foods’ John Cahill. In financial terms, that is a market cap loss of roughly $300 billion dollars (despite the additions of Relx and Avogo) for HBS over the previous year.
Based on market capitalization, 31% of the world’s largest 500 public companies now have chief executives who earned an MBA according to the Financial Times (a number that has remained steady since last year). On that list, Harvard, INSEAD, Stanford, and Wharton account for 46% of CEOs running those companies. These programs also represent roughly 44% of the market cap among the Financial Times’ list of the top companies run by MBAs.
AMERICAN PROGRAMS GRADUATE OVER 75% OF MBA CEOs
Beyond the ‘Big Four,’ you’ll find the numbers coalesce. Columbia and Northwestern Kellogg can each tout six CEOs on the list – just one shy of Stanford and Wharton. And Booth and Stern are tied with five. Surprisingly, Vanderbilt Owen MBAs operate three companies on the list – higher than Tuck, Ross, and Yale. An even bigger surprise: MIT Sloan doesn’t have one MBA as a chief executive among the top companies cited in the Financial Times’ list.
While European and Asian MBA programs have made in-roads, American schools still dominated the CEO list, representing 22 of the 33 schools on the list. The number is even more resounding at the macro level, with American MBA programs graduating 78 CEOs on the list compared to just 20 outside the states.
Despite the average tenure of Fortune 500 CEOs approaching a decade, you’ll find some movement school movement compared to the previous year. Columbia and NYU Stern each gained two CEOs, with Wharton and Vanderbilt Owen gaining one. Along from HBS dropping six CEOs, INSEAD, Stanford, Booth, Kellogg each lost one. In addition, Indiana Kelley, Texas McCombs, and the University of Illinois fell off the Financial Times list, after having one CEO each in the 2014 list.
HIGH MARKET CAPS ARE DECEIVING AT WHARTON AND BOOTH
At $1.5 trillion dollars, HBS’ market cap towers over everyone else, including Stanford ($443.2B), INSEAD ($361.1B), NYU Stern ($340.9B), and Kellogg ($314.3B). Technically, Wharton gives HBS a run for its money, with $935.9 billion in market cap – a far higher average per company than its rival. However, those numbers are skewed by $508.3 billion coming from Google, which is run by Sundar Pichai (’02), and another $287.8 in cap from Johnson & Johnson, where Alex Gorsky (’96) helms the ship. The same is true of Chicago Booth, where a heavy chunk of its $729.7 market cap is comprised of Microsoft, courtesy of Satya Nadella (’97).
Indeed, HBS MBA CEOs also represent many of the top brands worldwide, including JPMorgan Chase (Jamie Dimon), General Electric (Jeffrey Immelt), Ford Motor Company (Mark Fields), MetLife (Steven Kandarin), and Hewlett Packard (Meg Whitman). But HBS isn’t the only MBA program that produces star power. INSEAD grads head Lloyds of London, Phillip Morris, and Credit Suisse. The Stanford Graduate Business School counts the CEOs of Anheuser Busch InBev, Time Warner, General Mills, Capital One, and General Motors among its alumni. Booth boasts the CEOs of Chevron, Bridgestone, and Carnival, while Berkeley Haas can trot out CEO alumni from Adobe and Novaris to prospective students.
And that doesn’t even account for outlying schools, which have churned out one celebrated CEO alum. Those MBA programs include: Duke Fuqua (Apple’s Tim Cook), Minnesota Carlson (Wells Fargo’s John Stumpf), Babson College (Toyota’s Akio Toyoda), London’s Cass Business School (Coca-Cola’s Muhtar Kent), Wisconsin (Halliburton’s David Lesar), and Yale (PepsiCo’s Indra Nooyi).
TOP CEOs OFTEN GRADUATE IN PAIRS
The Financial Times’ data also reveals that some future CEOs graduate in pairs. At HBS, Dimon and Immelt graduated in the same class (’82). The same is true of classmates like Amgen’s Robert Bradway and Vodafone’s Vittorio Colao (’90); Aon’s Gregory Case and Ford Motor Company’s Mark Fields (’89); Relx’s Eric Engstrom and Nextera Energy’s James Robo (’88); or Corning’s Wendell Weeks and Discover Financial’s David Nelms (’87). Talk about a lot of brainpower running around Cambridge in the late 80s!
And you’ll find this pattern at other programs as well. The INSEAD Class of 1991 features Lloyd Banking Group’s Antonio Horta-Osorio and BG Group’s Helge Lund. At Columbia, Welltower’s Thomas Derosa and Liberty Global’s Michael Fries also shared some of the same classes as 1988 graduates (with Morgan Stanley’s James Gorman graduating a year ahead of them in 1987). Not to mention, Booth’s 1980 Class included both Chevron’s John Watson and Carnival’s Aaron Donald.
While CEO placement can be considered lagging indicators for the quality of instruction, you could argue that they symbolize the name branding of top MBA programs. More important, they represent the power of the network. Just look at Apple, where two Duke grads (Senior V.P. Eddy Cue and COO Jeff Williams) are among the top executives at Apple alongside Tim Cook.
See the following pages to discover where your favorite CEOs graduated from – and during what year.