Full Form of CEO

Updated on April 17, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Full Form of CEO – Chief Executive Officer

The Full Form of CEO stands for Chief Executive Officer. The chief executive officer is the head of any corporate organization, public, private or non-government organization. He is the senior-most member and executive of the corporate organization. He is the only senior administrator who looks after an organization’s entire management and operations and reports directly to the board of directors and chairman of an organization with the sole objective of generating wealth for its stakeholders and shareholders.

Full Form of CEO

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Key Takeaways

  • The CEO, Chief Executive Officer, holds the highest position within organizations, spanning corporate, public, private, and non-governmental sectors. Operating as the ultimate leader, they are responsible for directing management and operations. Answerable to the Board of Directors and Chairman, the CEO’s primary objective is to create value for stakeholders and shareholders.
  • When appointing a CEO, their training and pertinent experience emerge as pivotal factors in decision-making.
  • The US Bureau of Labor Statistics projects an 8% rise in demand for CEO roles until 2026. This growth forecast surpasses the average employment expansion rate of 7% observed across various industries in the United States.

Educational Qualification Required to Become a CEO

The required educational qualification of the CEO depends on the industry and employer he is working with. Employers give preferences to those who are graduates and have considerable work experience in the required industry. The Chief Executive Officer is often selected from within the company instead of hiring from outside. The following are the two major considerations being envisaged while selecting the CEO:

Educational Qualification of CEO

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  • Training: Some companies require the CEO to be under training before they are boarded as Chief Executive Officer. Training could be related to executive development, leadership, and ongoing professional skills.
  • Relevant Experience: They are expected to carry a considerable relevant experience with them. The board of directors usually prefers a CEO with progressive and sustainable performance and responsibility.

There is no specific qualification as such to become a CEO. At the very outset of the 21st century, most CEOs used to have degrees in technical subjects like science, law, engineering, finance, etc. Describing the explicit qualification to become a CEO is a complex subject. To become a Chief Executive Officer, the concerned person needs to know about every department in the organization he is heading. However, every department has its heads directly reporting to the CEO. A CEO should be at least professionally qualified in the subject of the organization he is leading.

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Skill Requirement

Skills required to become a CEO vary from organization to organization, but there is some basic and common skill set required for every Chief Executive Officer. The following are the skill requirements.

Skill Requirement of CEO

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  • He should have an entrepreneurial mind, including outstanding management and leadership skills.
  • He should be a great communicator who enjoys his work with minimum support and working autonomously.
  • He should be able to create insights and make decisions quickly.
  • He should pick up new ideas very quickly and implement them the same.
  • He should create an environment where people love working with him and work together to get the desired results from colleagues.

Responsibilities of CEO

The responsibilities of the CEO vary in the industry and from organization to organization, its goals, products and services, and operational requirements. The roles and responsibilities are set up by an organization’s chairman and board of directors. The following are the basic responsibilities.

CEO responsibilities

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  • CEOs should be able to make major decisions about the company’s management and administration.
  • He should make sure the environment of the corporation is healthy and positive.
  • The CEO should lead the organization so that he motivates his colleagues and every employee of the company.
  • He should make sure that required changes are being made in policies and decisions if required.
  • The CEO should be able to lead the entire operations.
  • CEOs should make sure that roles and responsibilities are adequately assigned to subordinates.
  • Should oversee fundraising planning and execution of the same has been implemented to benefit the organization and respective stakeholders.
  • The CEO should take part in every possible meeting of the board of directors and assist in selecting members of the boards.
  • The CEO should oversee every department, like production, marketing, and finance, and ensure that the delivery and quality of goods and services are maintained.
  • He should ensure that every resource in the organization should be used in the best possible way to generate the wealth of the respective shareholders.
  • The CEO should review and participate in the annual and interim budget planning and ensure expenses align with budgeted expenditures.
  • Finally, he should make sure the products and services being developed by the corporation are in line with the organization’s mission and vision as a whole.

Job Opportunities

According to the United States Bureau of Labor Statistics, the job opportunities for the CEO are expected to rise by 8% through 2026, which is relatively higher than the average employment growth rate of 7% across the various other industries in the United States.

Salaries of CEO

Chief executive officers have been consistently outpacing the average pay of working professionals. It has been observed that in the last ten years, the average pay of CEOs of fortune 500 companies has increased by more than $0.5 Million to $14.5 Million in the year 2018. In other cases, workers’ wages and the non-supervisory nature of jobs have witnessed an increase of $800 a year and a yearly income of $39,950 in 2018.

According to the survey conducted by Stanford University’s Rock School for corporate governance, the median salary of the Chief Executive Officer of fortune 500 companies is circa $10.5 Million.

The salary of the average CEO depends on industry, location, experience, and the kind of employer he is working with. According to the United States Bureau of Labor Statistics average salary of CEO across the United States are:

  • The annual Median Salary is $186,600.
  • Annual Top 10% Salary: $208,000
  • Annual bottom 10% Salary: 68,360

Conclusion

In conclusion, we could state that the CEO is the person who has the overall responsibility of leading the organization by providing vision, creating, planning, and implementing strategic decisions towards achieving the common objectives and generating wealth for respective stakeholders. The Chief Executive Officer assures that the organization’s leadership creates awareness in the internal and internal competitive environment, including the opportunities for mergers and acquisitions, increasing the customer base, markets, and potential new industries.

The normal working environment of the CEO depends on various factors like industry, location, size of an organization, etc. Top fortune 500 companies’ Chief Executive Officer jobs normally work for more than 40 hours per week, which could include sometimes working on weekends and very often requiring travel and even work on holidays.

Top CEOs are working and employed in every industry in today’s corporate world; even if the business is small or big, it doesn’t matter. Without regard to the industry, the Chief Executive Officer is working; the nature of the work of every CEO is very stressful and faces pressure, the reason being they are the only ones responsible for the company’s bottom line.

Frequently Asked Questions (FAQs)

1. What is the importance of a CEO?

The Chief Executive Officer (CEO) is a top executive responsible for a company’s overall management and strategic direction. The CEO plays a crucial role in setting and executing the company’s vision, making important decisions, overseeing operations, and ensuring the organization’s growth and success.

2. Which is higher, CEO or MD?

In many corporate structures, the roles of CEO (Chief Executive Officer) and MD (Managing Director) can refer to the same position. However, in some cases, especially in larger organizations, the CEO may be the top-ranking executive responsible for strategic decisions. At the same time, the MD may focus more on day-to-day operations.

3. Which positions are similar to a CEO?

Positions similar to a CEO include Chief Operating Officer (COO), President, Executive Director, and Managing Director (MD). These roles often involve top-level leadership, decision-making, and overseeing various aspects of the organization’s functions. The specific responsibilities may vary based on the company’s structure and industry.

Recommended Articles

This has been a guide to the Full Form of CEO, i.e. (Chief Executive Officer) and its definition. Here we learn the education qualification and skills required to become a CEO, the responsibilities and job opportunities of the Chief Executive Officer, and its Salaries. You may refer to the following articles to learn more about finance –

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