Marathon CEOs : an examination from the upper echelons perspective

Abstract

In response to the recent call in the research of upper echelons for more attention to executives’ off-the-job experiences, this thesis examines an interestingly prevalent facet in CEOs’ personal lives: running marathons. Running marathons shapes not only the physical fitness of CEOs but also their cognitions and values systems, in turn affecting their firms’ strategic decisions and outcomes. Specifically, in two separate studies, I examine two sets of outcomes: firms’ strategic persistence and the compensation structure of top management teams. Study One examines how a CEO’s marathon running is associated with his/her firm’s strategic persistence and firm performance under various environmental conditions. I tested the predictions using a unique, hand collected dataset from the World Marathon Majors (WMM) running records from 2009 to 2019. The results suggest that there is a positive association between marathon CEO and firms’ strategic persistence. Moreover, the positive relationship between marathon CEO and firm strategic persistence turns stronger when the CEO runs more marathons and when the CEO runs marathons for longer time. In addition, I find that when environmental adversity is high, marathon CEO is positively related to firm performance. However, when environmental dynamism is high, marathon CEO and firm performance relationship becomes negative. Study Two examines how a CEO’s marathon running may influence his/her own pay performance sensitivity and CEO - top management team (TMT) pay egalitarianism. Using the same data source from WMM, the results suggest that there is a positive association between marathon CEO and CEO’s pay performance sensitivity, and this positive relationship becomes stronger when the firm is having constraint resource, and when the firm is under market uncertainty. The results also suggest that there is a positive association between marathon CEO and CEO-TMT pay egalitarianism, and the relationship turns stronger when the CEO runs more marathons, and when the CEO run marathons for longer time. This thesis has several contributions. First, it contributes to upper echelons theory by joining the growing discussion of top executives’ off-the-job experience and its influence on organizational decisions and outcomes. Second, it contributes to strategic change literature in examining the behavioural aspect of decision-makers as an antecedent in influencing firm strategic persistence. Third, it adds to top executives’ compensation studies by studying CEO-level factors and the influences on CEO compensation structure, namely the pay performance sensitivity. Fourth, it extends top executives’ compensation literature by examining the compensation structure of the entire top management team. Finally, this thesis indicates that CEOs marathon running as an interesting phenomenon has both theoretical implication to strategic leadership research and practical implication to practitioners.