Characteristics of Successful Tech CEOs

CHARACTERISTICS OF
Successful
Technology CEOs
RESEARCH REPORT
CONTENTS
Introduction 3
Research Report
Topic One: Education 4
Topic Two: Experience 8
Topic Three: Internal vs. External Hire 19
Topic Four: Age 22
Topic Five: Tenure 25
Topic Six: Combined Chairman and CEO 29
Methodology 32
About Vell Executive Search 33
Dora Vell 34
© Copyright, 2009 by Vell & Associates Inc. All rights reserved. Printed in the United States of
America. No part of this publication may be reproduced or distributed in any form or by any
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108 of the United States Copyright Act, without prior written permission of the publisher.
3
INTRODUCTION
This Vell research report on Characteristics of Successful CEOs investigates

whether common perceptions regarding the predictors of CEO success are valid.
The research uses data about public technology products companies in New
England with over $100 M in revenues – and their CEOs.
Our research examines the correlation (or lack of ) between a company’s

performance and the CEO’s education, experience, tenure, age, reliance on an
independent Chair, and whether the CEO came in as internal promotion vs.
external hire.
Not unexpectedly, technology companies differ from other companies in many

significant ways. Although we work extensively with technology CEOs, some of
the findings were surprising to us. For example, the predominance of founders
among companies with revenues between $100 M – $1 B was unexpected.
Each topic has three sections. The “Patterns Detected” section summarizes the
underlying distribution of our data set, e.g., the percent of CEOs who were
founders by company size. The “So Where Were the Differences” section reports
the correlation between corporate performance and the relevant characteristics,
e.g., founders vs. non-founders. The “Key Take-Aways” section highlights the
most striking conclusions.
We hope that you find this study both informative and insightful. If you would
like to discuss any aspect of this study further, please contact us at
info@vell.com. Your input will help fuel investments in future research we
publish.
Best Regards,
Dora Vell
CEO
www.vell.com
4 CHARAC TERISTICS OF SUCCESSFUL TECHNOLOGY CEOs
Topic One: Education

P AT T E R N S D E T E C T E D
CEOs are highly educated
Degree Distribution by Company Size
PhD
100% 11%
24% 21%
11%
80% Master’s Only
16% 15%
22%
60% 8% 12%
Master’s & MBA
16%
33% 21%
40%
Bachelor’s & MBA
20% 36%
22% 32%
Bachelor’s Only
0%
$100 M – $1 B >$ 1 B All
Company Revenue
◆ 68% have advanced degrees
◆ 43% of CEOs with advanced degrees have MBAs (33% of all CEOs have MBAs)
◆ 21% of all CEOs have PhDs
CEOs in larger companies differ from those in smaller companies as follows:

◆ Larger company CEOs are more likely to have an advanced degree (88% vs. 64% for companies
between $100 M and $1 B)
◆ A larger portion of big company CEOs with advanced degrees have MBAs (55% vs. 24% for
companies between $100 M and $1 B)
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CHARAC TERISTICS OF SUCCESSFUL TECHNOLOGY CEOs 5
CEOs with technical degrees predominate (59% of all CEOs in our study) and these are more
likely to have advanced degrees.
Level of Degree by Type
100%
21% Master’s / PhD,
3-Year Growth Rate
35% no MBA
80% 7% 45%
Master’s & MBA
60% 29% 12%
15%
21% Bachelor’s & MBA
40% 15%
43% Bachelor’s Only
20% 25% 32%
0%
Non -Technical Technical All
CEOs with Ivy League degrees were in the minority (40%) but over-represented – not a surprise
given the preponderance of Ivy Leaguers in New England.
◆ They are less likely to have technical backgrounds (33% vs. 68% for non-Ivy League CEOs)
SO WHERE WERE THE DIFFERENCES?

Not surprisingly, growth rates were lower at larger companies (61% vs. 93% median 3-year
growth rates)
CEO Performance by Company Size

600%
Max, 8394%
3-Year Growth Rate
400%
Max, 342%
200%
Median, 93%
Median, 61%
0%
Min, -20% Min, -22%
-200%
$100 M – $1 B > $1 B
Company Revenue
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MBAs outperform non-MBAs at companies under $1 B in revenue (159% vs. 89% median
3-year growth rates)
MBA vs. Non-MBA Performance Comparison

Company Revenue $100 M – $1 B
500%
Max, 8394%
3-Year Growth Rate
400%
Max, 324%
300%
200%
Median, 159%
100%
Median, 89%
0%
Min, -5% Min, -20%
-100%
MBA Non-MBA
For companies over $1 B in revenue, the results were much closer, 61% for CEOs with MBAs vs. 70%
for CEOs without MBAs.
The companies with CEOs holding technical degrees outperformed companies with CEOs
who didn’t (99% and 101% vs. 71% median 3-year growth rates)
Technical vs. Non-Technical Performance Comparison

All Companies
800%
Max, 8394%
Max, 607%
3-Year Growth Rate
600%
400% Max, 407%
200%
Median, 99% Median, 101%
Median, 71%
0%
Min, -36% Min, -3%
Min, -22%
-200%
Non -Technical Technical Technical
Bachelor’s Only Master’s / PhD
Even though the median 3-year growth rate was close for technical CEOs whether they had a BS or
higher degree, the maximum growth rate CEOs with just a BS degree was over 8000% – a company
that grew from $3.6 M to $306 M in 3 years. This outlier underscores the value of identifying and
taking advantage of technology trends, which often requires a technical background.
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In companies over $1 B in revenue, the technical degree premium was even more striking
(99% vs. 47% for companies whose CEOs had non-technical degrees)
Technical vs. Non-Technical Performance Comparison

Company Revenue > $1 B
400%
Max, 342%
3-Year Growth Rate
300%
200% Max, 200%
100% Median, 99%
Median, 47%
0%
Min, -22% Min, -3%
-100%
Non -Technical Technical
Companies whose CEOs have Ivy-League degrees significantly outperformed companies of

CEOs without (287% vs. 86%)
Ivy vs. Non-Ivy Performance Comparison

400%
Max, 8394%
3-Year Growth Rate
300%
Median, 287%
Max, 252%
200%
100%
Median, 86% Min, 43%
0%
Min, -20%
-100%
Non-Ivy League Ivy League
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K E Y T A K E A W AY S
MBA degrees are correlated with stronger growth, but only in companies between $100 M and $1 B.
Moreover, the strongest growth of any of the smaller companies was by a non-MBA CEO. An MBA is a
useful early indicator of business savvy – and perhaps drive, but as executives build their experience,
results should be a larger factor in selecting candidates than whether they have an MBA or not.
Some search committee members favor CEO candidates with strong business backgrounds, which
often blind them to excellent candidates with valuable technical backgrounds. Our experience is that
technical degrees often correlate with high intelligence levels and also that CEO comfort with tech-
nical details helps address strategic issues such as where the market is headed and where the best
opportunities are to be found.
An Ivy League degree is an asset to performance. Perhaps the admissions process in these programs
is a great filter for work ethic and smarts. Search committees tend to be biased either for or against Ivy
League degrees. This data shows that an Ivy League degree is positively correlated to performance.
Topic Two: Experience

CEO / General Manager Experience
Only 29% of companies have a current CEO with prior CEO experience.
CEO & GM Experience Distribution
GM Only
100%
34%
80% 45% CEO & GM
{ }
78%
60% CEO Only
31% 28% 29%
26%
40% 3%
3% None
20% 34% 26%
22%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
◆ CEOs at companies with revenue below $1 B were slightly more likely to have prior CEO
experience, but still only 31% did so.
◆ 34% of CEOs at companies between $100 M - $1 B in revenue had neither prior CEO or any GM
experience. Most of these CEOs were founders (70% of 34% or 23% of all CEOs).
◆ In companies with revenues over $1 B, 78% had GM prior experience only and 22% had CEO and
GM experience.
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Inversely, 72% of CEOs had General Manager experience, either at current or prior companies
GM Experience Distribution
}
7% 11% Both
100% 22%
10%
16%
80% 72% GM Current Only
45% 33%
60% 45% GM Prior Only
40%
None
44%
20% 38%
29%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
◆ All CEOs at companies with revenue over $1 B had GM experience.

◆ However, in most cases, CEOs were experienced as GMs at other companies.
◆ In companies with revenue over $1 B, CEOs typically have to prove their talent as GM in the
current company: 56% of these CEOs had been GMs at their current company.
◆ Only 11% of CEOs had GM experience at both their current and prior companies.

Prior CEO experience correlates to higher median 3-year growth rates.
Company Performance by CEO Experience

All Companies
125%
Max, 8394% Max, 607%
100%
3-Year Growth Rate
Median, 89%
75%
Median, 66%
50%
Min, 32%
25%
0%
Min, -22%
-25%
No Prior CEO Experience Prior CEO Experience
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However, the advantage is more pronounced at large companies.

250%
Max, 342%
Max, 200%
200%
3-Year Growth Rate
150%
Median, 130%
100%
Min, 61%
50%
Median, 33%
0%
Min, -22%
-50%
Perhaps because they rarely bring in outside CEOs - only 1 in 5 large company CEOs had prior CEO
experience - and when they do, the vetting process brings in best-in class-CEOs.
At companies between $100 M - $1 B - where 70% of CEOs are founders - CEOs with prior CEO
experience outperform their peers, but by a smaller edge.

Company Revenue $100 M to $1 B
125%
Max, 8394% Max, 607%
100%
3-Year Growth Rate
Median, 89%
Median, 77%
75%
50%
Min, 32%
25%
0%
Min, -20%
-25%
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General Manager (GM) experience initially appears to be detrimental to median 3-year

growth rates.
Company Performance by CEO’s GM Experience

All Companies
200%
Max, 8394% Max, 607%
3-Year Growth Rate
150%
Max, 106% Median, 110%

100%
Median, 98%
50%
Median, 39%
Min, 12%
0%
Min, -20% Min, -22%
-50%
Prior Company Only Current Company or Both No GM Experience
Where CEO Was GM
This can be partially explained because CEOs at companies with over $1 B in revenue are over-
represented in the GM experience class – recall they all had GM experience - and their growth rates
are slower than smaller companies.
In companies with revenues over $1 B, GM experience at the current company correlates with a
significant edge for median 3-year growth rates.

250%
Max, 342%
Max, 200%
200%
3-Year Growth Rate
150%
Median, 130%
100%
Min, 61%
50%
Median, 33%
0%
Min, -22%
-50%
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As you might expect in these large companies, CEOs with GM experience at a prior company have
significantly lower performance than those promoted from within. Especially in larger companies,
a successful track record with the company’s technology, market, competitors, and culture might
be a more significant predictor of success as CEO. This emphasizes the importance of having a solid
succession and development plan in larger companies.
In addition to a solid succession plan, companies could benefit greatly from a talent management
program, where the talent in their specific industry is tracked and nurtured over years. Potential
successors are courted over years and relationships developed with key players and up and comers
in the industry so that when they are needed they can be easily approached.
In companies with revenues between $100 M and $1 B, the highest median 3-year growth rate
was associated with CEOs who lacked GM experience – 73% of these being company founders.
Company Performance by CEO’s GM Experience

200%
Max, 8394% Max, 607%
3-Year Growth Rate
150%
Median, 110%
100%
Median, 89%
Max, 56%
50%
Median, 43%
Min, 12%
0%
Min, -5%
Min, -20%
-50%
GM Prior Only GM Current or Both No GM Experience
Where CEO Was GM
Among the CEOs with GM experience in smaller companies the result is the inverse of that found in
larger companies: experience as GM in a prior company correlates to higher median 3-year growth
rates than GM experience in the current company or both.
K E Y T A K E - A W AY S
Prior CEO experience is more important to companies with revenue over $1 B.
In smaller companies, a very small percentage of CEOs have prior CEO experience.
GM experience is not a predictor of strong corporate revenue growth.
In larger companies, all CEOs have some GM experience. In this class of companies, experience as a
GM in the current company is strongly correlated to higher performance, underscoring the impor-
tance of familiarity with the company’s challenges and options.
In companies with revenues between $100 M - $1 B, CEOs without GM experience – most of whom
are founders – are the top performers. Companies with revenues between $100 M – $1 B are more
likely to look at outside candidates with prior CEO than prior GM experience.
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Strategy Role
Only 13% of CEOs in our study had held a Strategy role. All of these were in companies with
revenues between $100 M – $1 B.

Median 3-year growth rate was higher for those CEOs with Strategy backgrounds.
CEO Performance by Background Experience

All Companies
250%
Max, 8394%
Max, 607%
200%
3-Year Growth Rate
150% Median, 159%
100%
Median, 82%
50%
0%
Min, -5%
Min, -22%
-50%
No Strategy Background Strategy Background
While the median 3-year growth rate was higher for those CEOs with Strategy backgrounds, this
may be partly due to the fact that they are in smaller companies, which typically experience higher
growth rates.
Both strategy and operational skills need to be present when selecting a CEO. Executives with
strategy backgrounds can make a significant impact as CEOs if they are also skilled in operations,
but this combination of talents is rare.
Succession planning committees thinking about future CEO candidates should be assessing ex-
ecutives with strategy backgrounds for operational potential – and where merited – giving them
opportunities to develop and hone their operational skills through a series of progressive and
meaningful roles.
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Consulting Role
Only 8% of CEOs in our study had worked previously as consultants. All of these were in companies
with revenues between $100 M – $1 B. Given that the companies in our study were product ven-
dors, it is not surprising that only a small subset had a consulting background.

Consulting experience correlates with higher median 3-year growth.

All Companies
200%
Max, 8394%
Max, 159%
3-Year Growth Rate
150%
Median, 110%
100%
Min, 106%
Median, 76%
50%
0%
Min, -22%
-50%
No Consulting Background Consulting Background
As with strategy backgrounds, consulting experience correlates with higher median 3-year growth
rates, but these folks are in a minority (8%) and found only in companies with revenues between
$100 M – $1 B.
Executives with consulting backgrounds can make a significant impact as CEOs and should be
considered but only if they also understand the product side and can operate a business.
Succession planning committees thinking about future CEO candidates should give executives
with consulting backgrounds opportunities to demonstrate their operational abilities.
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Engineering Role
29% of CEOs had held engineering roles, with almost all of these (91%) in companies with revenues
between $100M – $1 B. In this smaller company set, they constitute 39% of CEOs. Only 11% of CEOs
in companies with revenues over $1 B had engineering experience.

Median 3-year growth rate was higher for those CEOs with prior engineering functional roles.

150%
Max, 8394%
Max, 407%
3-Year Growth Rate
100%
Median, 98%
Median, 66%
50%
Min, 43%
0%
Min, -22%
-50%
No Engineering Background Engineering Background
Again, while the median 3-year growth rate was higher for those CEOs who had held engineer-
ing functional roles, this may be partly influenced by the fact that most (91%) of these CEOs are in
smaller companies, which typically experience higher growth rates. Even in the smaller companies,
however, CEOs with engineering experience correlate with superior median 3-year growth rates.
Because the maximum, minimum, and median numbers are the same for all companies as for
companies in the $100 M – $1 B range, we only show the latter, more relevant, chart.
We recommend that while candidates with business backgrounds need to be considered, a good
grounding as an engineering executive should be considered a positive indicator of success. When
paired with strong business acumen, experience in engineering can broaden a CEO’s perspectives
on the potentials of the technology and help with the strategic orientation and nimble reposition-
ing of the company based on changes in market and competitive conditions.
Some search committees do value the engineering functional experience as a real asset, because
deep understanding of the technology fundamentals, paired with a good business mind is a decid-
edly strong indicator for performance.
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Sales & Marketing Roles
Most CEOs (66%) did not come from a Sales & Marketing background.
CEO Background Distribution
11% 16%
Both
100% 17%
7% 11% 8%
10% 11% 11% Marketing Only
80%
60% Sales Only
40% 66% 67% 66%

None
20%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
This was consistent across the different company sizes. Of those with sales or marketing back-
grounds, roughly half were likely to have a combined sales and marketing background. 80% of the
CEOs with combined sales and marketing experience were in the smaller companies.

The top performers were CEOs with marketing rather than sales backgrounds.
Company Performance by Background Experience

All Companies
400%
Max, 360% Max, 8394%
Max, 607%
3-Year Growth Rate
300%
Max, 252%
200% Median, 200%
Median, 147%
100%
0% Min, 10%
Min, -22% Min, -20% Min, -5%
-100%
Sales & Marketing Sales Only Marketing Only Neither
Background
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Executives with sales experience and executives with marketing experience outperformed executives
with neither.
Interestingly, all companies whose CEOs had both sales & marketing backgrounds performed the worst.
When sales and marketing are combined, the tendency has been to give the role to a strong sales ex-
ecutive, who focuses on field marketing as opposed to strategy and product management / marketing.
Many technology company search committees focus heavily on sales backgrounds. Marketing
backgrounds tend to be considered less frequently, especially in the B2B sector. It may be that
marketing positively correlates to performance only when the executive has had strategic market-
ing experience. Understanding how to focus the company and targeting it to the right buyers may
be more valuable than tactical sales execution. Clearly, both marketing strategy and sales execu-
tion are required for the functioning of a company, but the question here is who is at the helm and
what bias they bring to the thinking of its strategy.
Finance
16% of CEOs in our study had experience in finance, with the majority (83%) of these CEOs in
companies with revenues between $100 M – $1 B. CEOs with finance experience constitute 11% of
CEOs at companies with revenues greater than $1 B and 17% of CEOs at companies with revenues
between $100 M – $1 B.

In companies with revenues between $100M – $1 B, CEOs without finance experience produced
significantly higher 3-year growth rates.

150%
Max, 8394%
Max, 159%
3-Year Growth Rate
100%
Median, 91%
50%
Median, 43%
0%
Min, -5%
Min, -20%
-50%
No Finance Background Finance Background
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CEOs without finance experience produced significantly higher median 3-year growth rates than
CEOs with finance backgrounds in companies with revenues between $100 M – $1 B. However, the
highest performing CEO had a finance background, so there are exceptions to the rule.
Financial acumen, including a clear understanding of performance measurements, is a vital
requirement for an executive, especially in this era of higher regulation. Financial executives tend
to be well prepared for the top role because they have access to the boardroom at very early stages
in their careers.
Perhaps the correlation between prior finance roles and lower corporate growth rates is because
financial executives tend to be selected in turnaround or financial re-engineering situations that
have measures of success other than revenue growth.
Venture Capital or Private Equity

Only 8% of CEOs had venture capital or private equity experience and most of these were in
smaller companies.

As with strategy backgrounds, VC and investment experience correlates with higher median
3-year growth rates, but these executives are in a minority (8%) and found mainly in companies
with revenues between $100 M – $1 B.

All Companies
400%
Max, 8394%
Max, 360%
3-Year Growth Rate
300%
Median, 200%
200%
100%
0%
Min, -22%
-100%
No VC / Private Equity VC / Private Equity
Background Background
Venture Capital and Private Equity often attract the best and brightest. In our sample, the perfor-
mance by CEOs with experience in VC or private equity firms was superior to their peers. As with
consulting or strategy backgrounds, when VC or private equity experience is paired with opera-
tional capability, it can become a very potent background for a CEO.
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Topic Three: Internal vs. External Hire

39% of all CEOs were founders. However, all the founders were in companies with revenue
CEO Distribution
100% 21% 24% Externally Hired

33%
80%
28% Internally Promoted
60% 37%
Founder
40% 67%
52%
39%
20%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
◆ Founders constitute 52% of CEOs in companies between $100M – $1B.
◆ 14% of these founder-CEOs were co-founders who were promoted into the CEO slot.
◆ 37% of all CEOs were internally promoted, including 67% of CEOs at companies with revenue
> $1 B.
◆ 24% of CEOs were recruited externally.
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Founders turned in the best revenue growth rates, partially because they are all in smaller
companies.
Company Performance by CEO Origination

All Companies
200%
Max, 607% Max, 8394%
Max, 407%
3-Year Growth Rate
150%
100%
50% Median, 58%
Min, 33%
0% Min, 12%
Min, -22%
-50%
Founder Internally Promoted Externally Hired
Founders and externally hired CEOs both had an edge over internally promoted CEOs in terms of
3-year median growth rates.
The performance difference between external hires and internally promoted executives is
significantly greater (3x greater) for companies with revenues > $1 B than for companies with
revenues between $100 M – $1 B.

Company Revenue >$1 B
150%
Max, 342% Max, 200%
3-Year Growth Rate
100%
Median, 99%
50%
0%
Min, -22%
-50%
Internally Promoted Externally Hired
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In companies with revenue between $100M – $1B, founders outperform all other CEOs, but
they have only a slight edge over external hires.
Company Performance by CEO Origination

150%
Max, 607% Max, 8394%
Max, 407%
3-Year Growth Rate
100%
50%
0%
Min, 12%
Min, -20%
-50%
Founder Internally Promoted Externally Hired
Founders who can scale in management skills as the company grows are able to apply their
in-depth knowledge and passion to drive higher growth rates.
Entrepreneurial founders are passionate and intimately knowledgeable about the products
and markets they serve. There are many founders that have the ability to scale their skills as the
company grows and deliver superior performance in companies up to $1 B in revenue.
It was surprising that external hires outperformed internal hires even in larger companies, where
you’d expect greater bench strength.
In spite of this, 75% of CEOs in the larger companies were internal promotions.
There may be a bias to bet on the ones you know intimately when internal and external candidates
are each a close fit for the CEO role. Conversely the bar for external candidates may be slightly
higher.
Companies with a strong succession planning process give internal candidates opportunities to
develop their skills and vie for the CEO slot. But these companies go with outside candidates when
the external candidates are clearly a better fit than anyone in the internal pool. Even when they
select an external CEO, the internal talent pool is typically strengthened as a result.
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Topic Four: Age

Smaller companies have a higher percentage of CEOs older than 60.
CEO Age Distribution
100% 22%
29% 60–69
31%
80%
50–59
60%
48% 67% 53% 40–49
40%
20% 30–39
17% 16%
3% 11% 3%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
The predominance of older CEOs in companies with revenues between $100 M – $1 B is

partially attributable to over half of these CEOs being founders.
Non-Founder vs. Founder Age Distribution

100% 14% 60–69

80% 47%
50–59
60% 64%
40–49
40% 33%
20% 30–39
21% 13%
7%
0%
Non-Founder Founder
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Interestingly, there was no apparent correlation between age and overall tenure at a company.
Correlation between Age and Tenure at Company

All Companies
70
65
60
55
Age
50
45
40
35
0 5 10 15 20 25 30 35 40
Tenure at Company
Nor is there an apparent correlation between age and tenure as CEO of that company.
Correlation between Age and Tenure as CEO

Founders vs. Non-Founders
70
65
60
55 Founders
Age
50 Non-Founders
45
40
35
0 5 10 15 20 25 30
Tenure as CEO
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CEOs between 38-49 years old do correlate with higher median 3-year growth rates.
Company Performance by CEO Age Group

300%
Max, 8394% Max, 407%
Max, 252%
3-Year Growth Rate
200%
Median, 156%
100%
Min, 76% Median, 85%
Median, 56%
0% Min, 12%
Min, -20%
-100%
38–49 50–59 60–69
Age Group
In part, this is because companies with revenue between $100 M –$1 B are over-represented in the
youngest age group. However, the performance edge of younger CEOs is consistent when looking
at CEOs from the smaller companies by themselves.
The edge of younger CEOs is consistent, though more muted, in companies with revenues
> $1 B.
Company Performance by CEO Age Group

200%
Max, 342%
3-Year Growth Rate
150%
Median, 106%
100%
Max, 61%
Median, 66%
50%
Median, 29%
0%
Min, -3%
Min, -22%
-50%
38–49 50–59 60–69
Age Group
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Interestingly, the only CEO of a company with > $1 B in revenue who was under 50 outperformed
the majority of CEOs.
Youth can be a real asset to emerging companies, especially those under $1 B. In technology com-
panies, executives familiar with emerging technology tend to be younger.
Ages 50-59 seem to be ideal for optimal company growth for companies > $1 B.
Topic Five: Tenure

Of the CEOs who have been in their position at least 3 years – the focus of our research – over
87% have been at their companies more than 5 years.
Distribution of CEOs by Tenure at Company
>20
100%
24% 22% 24%
80% 16–20
10% 11% 11%
14% 11% 13%
60% 11–15
40% 33%
41% 39% 6–10
20%
22% 4–5
10% 13%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
The pattern of tenure at their current company for the CEOs in our study is fairly consistent across
company size. The exception is that in larger companies the mix of CEOs who have been there less
than 10 years is tilted more towards those who have been there less time – between 4 – 6 years.
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Of the CEOs who have been in their position at least 3 years – the focus of our research – over
79% of CEOs have been CEO at their companies more than 5 years.
Distribution of CEOs by Tenure as CEO
>20
100% 14% 10%
22%
10%
14% 16–20
80% 13%
10%
33%
60% 11–15
44%
40% 48%
6–10
44%
20%
21% 4–5
14%
0%
$100 M – $1 B >$ 1 B All
Company Revenue
The pattern of tenure as CEO at their current company is dramatically different by company size.
CEOs at larger companies are much more likely to be replaced after 5 – 10 years. Longer tenure at
companies with revenues between $100 M – $1 B reflect that over 50% of these CEOs were founders.
Our comparisons in this research are primarily among the 38 public technology companies in New
England with at least 3 years of reported results for the current CEO. It is important to observe that
including the 13 companies who had replaced their CEOs in the last 3 years (with an average tenure
as CEO of .85 years), the average tenure overall as CEO was 5.4 years.

Not surprisingly, the median 3-year growth rate was smallest for companies that replaced their
CEO in the last 3 years.
Company Performance Comparison by CEO Tenure Group

All Companies
150%
Max, 8394%
Max, 407%
3-Year Growth Rate
Max, 110%
100%
Median, 99%
50% Median, 59%

Median, 43%
0%
Min, -5%
Min, -17%
Min, -22%
-50%
<3 3.1– 6 >6
Years in Current Company as CEO
www.vell.com
◆ While some CEOs were replaced due to death or age-related retirement, most CEO replacements
could be tied to company struggles to reach growth targets.
◆ It was also surprising to see that the median 3-year growth rate for CEOs who have been in the
saddle for 3 – 6 years was significantly higher than that for longer-tenured CEOs.
The difference in median 3-year growth rate was much less for companies with revenues

150%
Max, 8394%
Max, 407%
3-Year Growth Rate
Max, 110%
100%
50%
Median, 43%
0%
Min, -5%
Min, -17%
Min, -20%
-50%
<3 3.1– 6 >6
The difference in median 3-year growth rate was markedly greater for CEOs who have been in
the saddle for 3 – 6 years in companies with revenues over $1 B.

150%
Max, 343%
3-Year Growth Rate
100% Median, 106%
Max, 61%
50%
Median, 21%
0%
Min, -3%
Min, -22%
-50%
3.1–6 >6
www.vell.com
In the chart below, we compare the 3 year growth rate for the companies that recently changed
CEOs for the 3 years before the change, with the growth rate since the new CEO – normalized to
a 3 year growth rate – in order to compare it with the last 3 years of growth for the companies
with long term CEOs.
Contrast Company Performance Before and After CEO Replacement

vs. Companies with Long Term CEOs - All Companies
150%
Max, 8394%
Max, 237%
3-Year Growth Rate
Max, 110%
100%
Median, 85%
50%
0%
Min, -17% Min, -6%
Min, -22%
-50%
Prior to Post Recent CEOs – Long Term CEOs
Recent CEOs Normalized
Comparing companies with recently changed CEOs against companies that had CEOs in place for
at least 3 years is tricky, since there is no 3-year track record for the same period.
The story shown here is that:
◆ most of the companies who changed CEOs in the last 3 years were growth challenged (the com
pany growth slowed before the transition)
◆ things have improved slightly after the CEO change
◆ but growth remains slower than at companies with CEOs who have been in place at least 3 years.
The implication is that when CEO transitions result from growth shortfalls, it can take a period of
time to show significant improvement.
Although there is much talk recently about the average tenure of CEOs declining, this trend is not
as strong among technology companies. Only 25% of these companies changed CEOs in the last 3
years – and in 4% of all companies, the CEO transition was due to a death of the founder.
However, it is the case that CEOs who have been in place between 3 – 6 years outperform their
peers with longer tenure as CEO, especially in the larger companies.
www.vell.com
Topic Six: Combined Chairman and CEO

Fewer than 50% of companies had independent Chairmen, and companies with revenue be-
tween $100 M – $1 B are slightly more prone to allowing one person to hold the combined roles.
CEO Only vs. CEO & Chairman Distribution
100%
44% CEO &

80% 53% Chairman
55%
60% CEO
40%
56%
45% 47%
20%
0%
$100 M – $1 B >$ 1 B All
Company Revenue

Companies with independent chairmen outperformed companies that combined roles.
CEO Only vs. CEO & Chairman Performance Comparison

All Companies
150%
Max, 8394%
Max, 324%
3-Year Growth Rate
100%
Median, 99%
Median, 63%
50%
0%
Min, -22% Min, -20%

-50%
CEO Only CEO & Chairman
CEO’s Scope of Responsibility
www.vell.com
The performance edge was more marked in larger companies.

150%
Max, 324%
3-Year Growth Rate
Max, 106%
100%
Median, 99%
50%
Median, 47%
0% Min, 10%
Min, -22%
-50%
There is a smaller edge for companies with revenue between $100 M – $1 B.

150%
Max, 8394%
Max, 324%
3-Year Growth Rate
100%
Median, 98%
Median, 74%
50%
0%
Min, -5%
Min, -20%
-50%
www.vell.com
The smaller edge for companies with revenue between $100 M – $1 B may be due to the fact that
there has not been an impetus to recruit an independent Chair when a strong founder has success-
fully transitioned from start-up to mid-sized company. Formalizing a separate Chair role tends to
happen as companies mature.
Companies with independent chairs do nominally outperform their peers based on median 3-year
growth rates. However, the labels can mask actual division of responsibilities.
In some companies, a CEO transitioning to a Chair-only role may influence selection of a coopera-
tive replacement CEO who lets the Chair still call the shots. In other companies, a strong CEO forced
to accept an “independent” Chair may influence the selection to retain as much free reign as
possible.
This is a controversial area and one that merits more investigation.
www.vell.com
Methodology for Vell Research on

Characteristics of Successful Technology CEOs
Vell Executive Search selected public technology companies in New England with revenues over
$100 M. Financial and technical data were collected from Hoovers, ZoomInfo, and archived press
releases.
Companies where CEOs had been on board for less than 3 years were excluded from most analyses.
The key exception was comparing performance of companies where the CEO has been on board
for at least 3 years (38 companies) vs. companies that recently replaced the CEO (13 companies).
Companies where the CEOs educational background was not available were excluded from the
educational analysis, leaving 34 companies for that analysis.
We intend to expand the analysis and would value hearing about your questions / concerns that
may not have addressed in this phase of the research.
www.vell.com
About Vell Executive Search

Vell Executive Search is a boutique executive search firm where board, CEO, and C-level assignments
are handled by experienced senior recruiters from the world’s largest firms – but able to focus more
time and attention on a fewer searches in a smaller company setting.
Vell has two areas of focus:
◆ Finding board, CEO, and C-level searches for technology companies
◆ Finding CIOs and their key direct reports for public and large private companies
Clients range from VC-funded to F1000 companies throughout New England and Canada.
WHY OUR CLIENTS CHOOSE US

Clients judge us by the caliber of candidate we help them recruit. Clients appreciate the speed and
tight communication they experience during our searches.
Here’s how we do things differently to exceed our clients’ expectations.
Dedicated, Experienced Recruiters
Our senior recruiters are veterans of the leading search firms, but at Vell Executive Search, they earn
more working on fewer searches. They have more time and attention to focus on your search.
In-depth Meetings with Hiring Executives
We can spend an entire day on-site interviewing the executive team and relevant board members.
We uncover and resolve conflicts, get a fix on the culture, and walk the team through a core com-
petency framework to ensure we surface all requirements.
Behavioral Interviewing of Candidates
We dig beneath candidates’ practiced responses to standard questions with behavioral interview-
ing. This approach ensures potential issues are surfaced before any offers are extended.
Tight Coordination
We meticulously track progress and status with candidates – making it easy to share status weekly
with you. And we respond to questions within 4 hours – 7 x 24.
Accommodate Your Timeframe
Whether you need to complete a hire by a deadline or you prefer to take a longer time to find the
ideal candidate, we have the flexibility to accommodate your schedule.
Deeper Reference Checking
Our extensive network of senior executives enables us to check blind references to reduce the risk
of post-hire surprises.
Speedy Negotiations
We’ve developed a methodology that ensures compensation issues are surfaced and resolved
early. This minimizes the risk of losing other terrific candidates while heading for a dead-end with
the initial choice.
TO LEARN MORE
For more information on Vell Executive Search please visit www.vell.com, email info@vell.com, or
call 781-416-4003.
www.vell.com
34
Dora Vell
CEO
Dora Vell is CEO of Vell Executive Search, a boutique executive search firm in
Boston. Ms. Vell has successfully completed numerous board member and
C-level executive searches – including CEOs, COOs, CIOs, and Vice Presidents – at
both public and VC-funded companies.
Ms. Vell was a partner in the Heidrick & Struggles technology practice for seven
years. Prior to her career as a search professional, Dora Vell successfully
managed both a 100-person development project and a $150 million sales
organization at IBM. Her sales and P&L experience at IBM has proven useful in
sales and marketing searches as well as with GM, CEO, and COO searches.
As the holder of seven worldwide patents, Dora has an unusually technical

background for a search executive, but one that helps her better understand
the needs of technology clients and technical executive roles as well as probe
candidates for the depth of their technical experience and expertise.
Ms. Vell has published and been quoted in numerous articles including the Wall
Street Journal, Global CEO magazine, Mass High Tech, the OPUS for the World
Economic Forum, Boston Business Journal, Globe and Mail, CIO.com and IEEE.
She has been a featured speaker on leadership at numerous conferences.
Ms. Vell currently serves on the advisory board of Zoominfo and is a member of
the board of Entrepreneur’s Organization. She is also a member of the Boston Club
and the NACD, having completed the director professionalism course. She previ-
ously served on the boards of Goodwill, Mary Centre for developmentally handi-
capped adults, garage.ca and RBC Capital Partners Telecommunications Practice.
Ms. Vell received an MBA from the University of Toronto, a Master in Computer
Science from the University of Waterloo and a Bachelor in Computer Science
from Carleton.
Email: dora@vell.com
Phone: 781.416.4088 office 617.416.9088 mobile
www.vell.com
35
We hope that you found this study

both informative and insightful.
If you would like to discuss any aspect of this study
further, please contact us at info@vell.com. Your
input will help fuel investments in future research
we publish. Additional printed versions of this
report may be available upon request. Electronic
copies can be downloaded from www.vell.com.
www.vell.com
Vell Executive Search
1050 Winter Street, Suite 1000
Waltham, MA 02451
Phone: 781-416-4003
Fax: 781-207-0553
info@vell.com
www.vell.com
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Characteristics of Successful Tech CEOs

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Characteristics of Successful Tech CEOs

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CHARACTERISTICS OF

Topic One: Education 4

Topic Two: Experience 8

Topic Three: Internal vs. External Hire 19

Topic Four: Age 22

Topic Five: Tenure 25

Topic Six: Combined Chairman and CEO 29

About Vell Executive Search 33

This Vell research report on Characteristics of Successful CEOs investigates

Our research examines the correlation (or lack of ) between a company’s

Not unexpectedly, technology companies differ from other companies in many

Topic One: Education

CEOs are highly educated

Degree Distribution by Company Size

◆ 68% have advanced degrees

◆ 21% of all CEOs have PhDs

CEOs in larger companies differ from those in smaller companies as follows:

Level of Degree by Type

SO WHERE WERE THE DIFFERENCES?

CEO Performance by Company Size

MBA vs. Non-MBA Performance Comparison

Technical vs. Non-Technical Performance Comparison

400% Max, 407%

Technical vs. Non-Technical Performance Comparison

200% Max, 200%

100% Median, 99%

Companies whose CEOs have Ivy-League degrees significantly outperformed companies of

Ivy vs. Non-Ivy Performance Comparison

Topic Two: Experience

CEO & GM Experience Distribution

◆ All CEOs at companies with revenue over $1 B had GM experience.

SO WHERE WERE THE DIFFERENCES?

Company Performance by CEO Experience

However, the advantage is more pronounced at large companies.

Company Performance by CEO Experience

Company Performance by CEO Experience

General Manager (GM) experience initially appears to be detrimental to median 3-year

Company Performance by CEO’s GM Experience

Max, 106% Median, 110%

Company Performance by CEO Experience

Company Performance by CEO’s GM Experience

SO WHERE WERE THE DIFFERENCES?

CEO Performance by Background Experience

150% Median, 159%

SO WHERE WERE THE DIFFERENCES?

CEO Performance by Background Experience

SO WHERE WERE THE DIFFERENCES?

CEO Performance by Background Experience

Sales & Marketing Roles

CEO Background Distribution

60% Sales Only

40% 66% 67% 66%

SO WHERE WERE THE DIFFERENCES?

Company Performance by Background Experience

SO WHERE WERE THE DIFFERENCES?

Company Performance by CEO Experience

Venture Capital or Private Equity

SO WHERE WERE THE DIFFERENCES?

Company Performance by CEO Experience

Topic Three: Internal vs. External Hire

100% 21% 24% Externally Hired

◆ Founders constitute 52% of CEOs in companies between $100M – $1B.

◆ 24% of CEOs were recruited externally.

SO WHERE WERE THE DIFFERENCES?