Did you know that a company's market value is directly linked to its CEO's reputation?
This means that the strategy for building the personal brand of the CEO, as well as other leaders within the company, should be a massive priority for companies - but in many cases it's not.
Some CEO's have been recruited because of their strong Personal Brand. Other CEO's are quite anonymous. But does their reputation actually have an effect on the company's market value?
A study by Weber Shandwick and KRC Research found that 44% of a company’s market value is directly attributable to its CEO’s reputation. This really highlights the impact a CEO’s public image can have on the overall financial health and valuation of the company.
The same study revealed that 95% of financial and industry analysts said they would purchase stock based on a CEO’s reputation, and 94% would recommend the stock to others based on the CEO’s reputation.
A very obvious example of this, I think, is Elon Musk and Tesla. Now, the reason I bring numbers into this is because I feel very strongly about it. In my job as a Branding strategist I meet people every day, especially CEO's, leaders and Entrepreneurs who for some reason or another don't want to, or don't prioritize working on their personal brand. (I also think some of them just don't know how to, or where to begin.)
So here are some stats that I hope will help prove my point:
Regarding the case of Elon Musk, for better or worse, there is substantial evidence that his actions and statements have a significant impact on Tesla's stock value. A study in the Journal of Financial Economics found that Musk's tweets significantly influence Tesla's stock price, with an average abnormal return of 1.6% on days he tweets about the company.
Here are some examples:
On August 7, 2018, Musk tweeted that he was considering taking Tesla private at $420 per share and had "funding secured." This tweet caused Tesla's stock price to spike by 11% initially. (Though it later faced volatility as the claim was scrutinized and resulted in an SEC lawsuit )
In May 2020 Musk tweeted "Tesla stock price is too high imo". Following this tweet, Tesla's stock price dropped by about 10%, erasing billions of dollars in market value within hours. How crazy is that?
Another survey (Brandfog CEO Survey, 2019), highlights that 82% of respondents trust a company more if its CEO engages on social media, and 77% agreed that a CEO’s social media presence positively impacts the company's brand reputation and market value.
Now I know what you're thinking, how is a CEO supposed to even have the time to work on their personal brand, they have a wholw freakin company to run? Well, one, I would argue it should be part of their job. And two, they have the power and resources to pay for someone to help them with this. If its someone in their marketing department, a consultant like me, a PR pro, or even an agencie - take your pick and do what suits you the best.
All I'm saying is, if you're not working on and leveraging your personal brand as a CEO, leader or Entrepreneur - you are leaving money (and a lot more) on the table. Investing in your personal brand is an investment that will never loose value.
With that being said, this is only true if you build a brand that is authentic to you. No one else can determine what that that is. Your voice and your values need to be at the center of your content. I will always stand for the concept of being radically authentic while building your personal brand. That's my call to action to you today. Go forth and be you! ;)
See you in the next edition of Brandfixing 101!
/M.