It’s not easy being king. This sentiment is particularly true for Fortune 500 founder-CEOs.
Just 18 run companies on the 2023 Fortune 500, a drop from 21 last year. In all, six founder-CEOs departed the list this year, and three joined the ranks.
Of the six founder-CEO departures, three were due to revenue declines from fiscal year 2021 to 2022. The minimum revenue to make this year’s list was $7.4 billion, up from $6.4 billion last year. The exits include Zillow Group’s Richard Barton, Coinbase’s Brian Armstrong, and Compass’s Robert Reffkin dropped off the 2023 Fortune 500 list, reporting revenue declines from fiscal year 2021 to 2022.
The other three departing executives stepped down as CEO but retained some connection with their companies. Netflix founder Reed Hastings, Starbucks owner-turned-CEO Howard Schultz, and Opendoor Technologies founder Eric Wu will still serve on their company’s boards. Hastings is Netflix’s executive chairman, and Schultz is Starbucks’ director. Wu resigned as CEO in December 2022, transitioning to president of marketplace at the real estate technology company and retaining a board seat.
Three founder-CEOs made the Fortune 500 list for the first time. South Korean e-commerce company Coupang, which moved its headquarters from Seoul to Seattle in 2022, debuted on the Fortune 500 at No. 195 in 2023. CEO Bom Kim founded the company, dubbed the “Amazon of South Korea,” in 2010. Airbnb and Skechers, led by founders Brian Chesky and Robert Greenberg respectively, are also new entrants on the Fortune 500 this year. Airbnb ranks at No. 450, jumping from No. 528 in 2022, and Skechers at No. 488, from No. 506.
Founder-CEO-led companies represent just 3.6% of the 2023 Fortune 500, down from 4.2% in 2022. Research from Harvard Business School found that under 25% of founder-CEOs still helmed their company when it went public, while a study from the University of North Carolina at Chapel Hill and the University of California, Irvine found that although founder-CEO-led companies had higher valuations at IPO, their retention at the helm added zero value to the company within three years.
That’s mainly because the entrepreneurial skills founders need to build a startup tend not to coincide with those required to lead and scale a larger company, as evidenced by the exits of Peloton cofounder John Foley and Chipotle’s Steve Ells.
Research from Duke University and Harvard Business School found founder-CEOs fare worse as managers than non-founders, and most become entrepreneurs because of the appeal of being their own boss. That discretion often means that founder-CEOs are less likely to adopt formal management processes, such as in hiring or promotions, says Victor Bennett, a professor of entrepreneurship and strategy at the University of Utah’s Eccles School of Business and one of the paper’s coauthors.
But companies face investor pressure to implement such professionalization and more bureaucratic processes as they grow, especially among the Fortune 500.
“To be a company of that size, you do need to professionalize. I don’t think anyone can keep the functioning of the company that big in their head,” says Bennett. “To delegate to people with the local expertise, or to have these repeatable processes, is really important.”
Founder-CEOs have a unique connection to their companies and feel instabilities at a deeper level from day one, says Amy Buechler, former batch director at Y Combinator. “By the time they go public, [their experience] actually becomes a source of their resilience, and non-founder CEOs don’t have that.”
Fortune 500 founder-CEOs are undoubtedly examples of this resilience. Their average tenure is nearly three times higher than all Fortune 500 CEOs. Many have engaged in similar professionalization endeavors while retaining their CEO seat, like Meta CEO Mark Zuckerberg, who tapped Sheryl Sandberg as chief operating officer in 2008 until her August 2022 year departure from the company.
Below are Fortune 500 founder-CEOs in 2023:
Mark Zuckerberg
Company: Meta Platforms
2023 rank: No. 31
Year founded: 2004
Michael Dell
Company: Dell Technologies
2023 rank: No. 34
Year founded: 1984
Elon Musk
Company: Tesla
2023 rank: No. 50
Year founded: 2003
Richard Fairbank
Company: Capital One Financial
2023 rank: No. 106
Year founded: 1988
Marc Benioff
Company: Salesforce
2023 rank: No. 133
Year founded: 1999
Jensen Huang
Company: Nvidia
2023 rank: No. 152
Year founded: 1993
Mark Millett
Company: Steel Dynamics
2023 rank: No. 176
Year founded: 1993
Bom Kim
Company: Coupang
2023 rank: No. 195
Year founded: 2010
Jack Dorsey
Company: Block
2023 rank: No. 234
Year founded: 2009
Ernest Garcia III
Company: Carvana
2023 rank: No. 308
Year founded: 2012
Niraj Shah
Company: Wayfair
2023 rank: No. 336
Year founded: 2002
Leonard Schleifer
Company: Regeneron Pharmaceuticals
2023 rank: No. 339
Year founded: 1988
Marc Rowan
Company: Apollo Global Management
2023 rank: No. 356
Year founded: 1990
Jeffrey Sprecher
Company: Intercontinental Exchange
2023 rank: No. 401
Year founded: 2000
Stephen Schwarzman
Company: Blackstone
2023 rank: No. 444
Year founded: 1985
Brian Chesky
Company: Airbnb
2023 rank: No. 450
Year founded: 2007
Jure Sola
Company: Sanmina
2023 rank: No. 471
Year founded: 1980
Robert Greenberg
Company: Skechers
2023 rank: No. 488
Year founded: 1992
