LOS ANGELES, June 16 /PRNewswire-FirstCall/ -- Companies led by CEOs with military experience have outperformed the S&P 500 Index over the past three, five and 10-year periods by as much as 20 percentage points, according to a study by Korn/Ferry International (NYSE:KFY) , the premier global provider of executive search, outsourced recruiting and leadership development solutions.
Published by Korn/Ferry in cooperation with the Economist Intelligence Unit, "Military Experience & CEOs: Is There a Link?" also found that CEOs with military experience tend to last longer in the job. CEOs with military experience have an average tenure of 7.2 years, while CEOs without military experience have an average tenure of 4.6 years.
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The study found that the 59 companies on the S&P 500 headed by CEOs with military experience provided an average annual shareholder return of 21.3% over the three-year period ending September 2005, versus 11.0% for the S&P 500 Index during the same time. For a five-year period, the ex-military CEOs provided a 9.5% return while the Index provided a -10.7% return, and for a ten-year period, the ex-military CEOs provided a 12.2% return versus a 9.4% return for the S&P 500 Index.
Featuring both a quantitative analysis of companies in the S&P 500 led by CEOs with backgrounds in the U.S. military, as well as qualitative in-depth interviews from four ex-military CEOs -- Clayton Jones of Rockwell Collins; Michael Morris of American Electric Power; Michael Jordan of Electronic Data Systems; and Steven Loranger of ITT Industries -- the study suggests that deft management of stressful situations during real-world military operations may well enhance performance in a corporate environment.
"There are clearly certain traits CEOs possess that drive their approaches to leadership, communication and, perhaps most importantly, the ability to translate company vision into tangible results," said Joe Griesedieck, vice chairman of Korn/Ferry International and head of the company's CEO Practice. "While we don't necessarily believe that one must obtain military experience to become a successful CEO later in life, it is evident that the leadership skills acquired during military training can absolutely enhance one's chances for success in corporate life."
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