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Aalto University School of Business Master's Theses are now in the Aaltodoc publication archive (Aalto University institutional repository)
School of Business | Department of Finance | Finance | 2014
Thesis number: 14537
The effect of surnames on the odds of becoming and succeeding as a CEO
Author: Kakkola, Roope
Title: The effect of surnames on the odds of becoming and succeeding as a CEO
Year: 2014  Language: eng
Department: Department of Finance
Academic subject: Finance
Index terms: rahoitus; financing; johtajat; managers; rekrytointi; recruiting; asenteet; attitudes; arviointi; evaluation; yrityksen koko; firm size; urakehitys; career development
Pages: 70
Key terms: race; racial indication; primacy effect; alphabetical positioning; name; surname; CEO; population; firm size; compensation
Abstract:
OBJECTIVES OF THE STUDY In this master's thesis I study surnames' effect on the odds of becoming and succeeding as a CEO. I analyze whether the racial indication and the alphabetical primacy of surnames affect the success of prospective and existing CEOs. The first effect is fundamentally based on racial discrimination. The second effect is based on psychological primacy effect. Firstly, I study whether White US CEOs' surnames are "whiter" and closer to the beginning of the alphabet than the names of White US population. Secondly, I analyze whether the "whiteness" and alphabetical positioning of surnames af-fects the firm size managed and remuneration.

DATA AND METHODOLOGY I use two different samples to study the effect. Firstly, I gather executive and company specific data of the S&P 1500 CEOs and their companies from the year 2011. Secondly, I use US Census 2000 genealogy dataset to analyze the surnames and their relative popularity among different races and ethnic groups. The US Census 2000 genealogy dataset is used to create both racial indication and primacy variables used in all the analyses. The surname comparison analyses between CEOs and the population are conducted with Z-tests and cumulative data. Surnames' effect on managed firm size and remuneration is analyzed with ordinary least square regression analyses.

FINDINGS OF THE STUDY I find that White US S&P 1500 CEOs have surnames which are considerably "whiter" and located closer to the beginning of the alphabet than in the White US population. The results are robust to the use of several racial indication variables. However, I do not find surnames to have an effect on the firm size managed or the remuneration of the CEOs. More likely, the results indicate that not only the CEOs of largest companies have whiter or alphabetically primal surnames, but all the CEOs seem to have them. I speculate that the differences between the White CEOs and the White population emerge in the earlier stages of prospective CEOs' careers. Firstly, discrimination favors prospective CEOs with names that are distinctively associated with white people. Secondly, alphabetical primacy increases prospective CEOs' chances of progressing in career due to cognitive reasons and satisficing principle.
Master's theses are stored at Learning Centre in Otaniemi.