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Publication in Academy of Management Discoveries

Picture of "Multi-CEOs: A Legitimacy Perspective on Executives Leading Multiple Firms" in the journal Academy of Management Discoveries (AMD) © Academy of Management Discoveries

It is hard to imagine how a CEO can run more than one firm successfully at the same time—so how do “multi-CEOs” justify themselves to investors and other stakeholders?

In a new study published in the journal Academy of Management Discoveries, researchers from TU Dortmund University and HEC Lausanne studied an unlikely but important phenomenon in the corporate world: “Multi-CEOs,” i.e., CEOs who run multiple independent companies at the same time.

Given the breadth of a CEO’s tasks and the CEO’s burden of ultimate responsibility for the success or failure of a company, letting a CEO run multiple companies at the same time must appear unwise or outright illegitimate to investors and many other stakeholders. As Constantine Alexandrakis, CEO of executive search firm Russell Reynolds Associates, once put it: “running just one company should take 150% of a CEO’s attention.”

In their study, the authors examine the careers of four prominent multi-CEOs: Elon Musk (Tesla and SpaceX), Carlos Ghosn (Renault and Nissan), Jack Dorsey (Twitter and Square), and Steve Jobs (Apple and Pixar). They find that multi-CEOs and allied actors such as boards of directors carefully manage the legitimacy of a multi-CEO arrangement in a variety of ways.

For instance, they often publicly admit that a multi-CEO arrangement is not desirable, but simultaneously suggest that it is inevitable in their specific situation. Firms often perform—and publicly discuss—a full CEO search process, which lends legitimacy to the ultimate outcome of a multi-CEO arrangement. “Also, multi-CEOs are often vocal about how much work it is, which signals to stakeholders that their concerns are valid and are taken seriously. At the same time, multi-CEOs claim that their seemingly superhuman task is indeed possible, for instance because they have great teams supporting them. In particular, they often have Chief Operating Officers, who take a lot of the workload off their shoulders. Elon Musk, for example, has Gwynne Shotwell as a trusted lieutenant who is effectively running SpaceX for him,” says Lorenz Graf-Vlachy, Professor at TU Dortmund University and one of the authors.

Further, multi-CEOs often enter symbolic compensation arrangements. Graf-Vlachy explains that “Steve Jobs was paid a salary of only 1$ by Apple. But he owned a lot of shares, so this reassured investors that he would only make money if they did, too.” Multi-CEOs also consciously split their time between firms’ headquarters, be it walking between them daily, as Dorsey did between Twitter and Square in San Francisco, or dividing their weeks between Paris and Tokyo, as Carlos Ghosn did for Renault and Nissan. Multi-CEOs further attempt to diffuse perceptions of conflicts of interests, for instance by claiming to recuse themselves from decisions that might affect both of their companies, or by having explicit decision rules.

Graf-Vlachy adds that “the study improves our understanding of how multi-CEOs get into their positions, and how they get away with it.” The study thus shines a light on the phenomenon of multi-CEOs and raises stakeholders’ awareness of the strategies used by multi-CEOs.

Read the entire study here.

Graf-Vlachy, L., Hensellek, S., & Haack, P. 2024. Multi-CEOs: A Legitimacy Perspective on Executives Leading Multiple Firms, Academy of Management Discoveries, online first.