While only 82, or 34%, of the top 243 listed Indian companies, promoters or family members are run by CEOs, these company leaders are reported to have given total returns to shareholders over a five-year period ending in March. Behind his professional CEO peers. 2020, the findings of a study by London-based executive search firm EMA Partners suggest.
EMA co-founder and managing partner, Krishna Prakash, said, “This is the first such study conducted to understand the current ratio of professional CEOs vs. family member CEOs in the country.” “It’s also … identify who created more shareholder wealth, family member CEO or professional CEO,” he said.
An analysis of the compound annual growth rate of total return for shareholders (TRS) found that during the study period, 243 listed firms reported an average 2% decline in TRS due to an epidemic-triggered market decline. Interestingly, family member CEOs outperformed the market, creating a positive 2% average TRS, while professional heads observe an average negative TRS increase of 4%.
Family members were predominantly in the health, lifestyle and pharma, and the majority in the industry and manufacturing sectors (67% and 53%, respectively). Professional CEOs were prominent in the basic materials, energy and utilities, finance, TMT and consumer and retail sectors.
Respondents include BSE-listed firms whose market capitalization. Is more than 100 crores.
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