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Dispelling the ‘Stock Clerk to CEO’ Myth

When these cases are not disclaimed as rare exceptions, they act as subtle propaganda for the corporate elite.

By Rick Paulas


(Photo: a-barth/Flickr)

In 1952, a boy nicknamed “Cork” began working at Walgreens as a stock clerk in Evanston, Illinois. It was a part-time gig, after high school classes and on the weekends. After graduation, he went to get a bachelor’s degree at the University of Michigan, and came back to the company in 1959 as a pharmacist. He worked his way up until, in 1963, Cork became the administrative assistant to the vice president of operations. Bigger and better titles followed: district manager, regional director, vice president, president. In 1971, Cork became the CEO.

It’s the true American tale: starting at the bottom and working your way to the top through a combination of hard work and company loyalty. But there’s a missing detail from the tale above that makes the whole thing less than inspirational. “Cork” was the nickname of Charles Walgreen III. His grandfather founded the company, and he took over the CEO role from his dad.

An examination of the 100 people who claim CEO positions in Fortune’s top 100 companies show only five such cases.

Here, then, is the general truth behind the inspiration tale of “stock clerk to CEO,” the carrot-on-the-stick myth meant to seduce the working class to put in extra hours and stick it out through the company’s ups and downs. Like the story of Cork’s rise to the top, there are an awful lot of holes in this narrative.

Foremost, it happens rarely enough to be considered more novelty than example. An examination of the 100 people who claim CEO positions in Fortune’s top 100 companies show only five such cases: General Motors’ Mary Barra, who started with the company at 19 years old; Kroger’s Rodney McMullen, who worked as a stock clerk in college; UPS’s David Abney, who started as part-time package loader; Coca-Cola’s Muhtar Kent, who first sold Coke out of a truck in Turkey; and Publix’s Todd Jones, who bagged groceries in a store in Florida. (It’s best not to think of this as five out of 100 as much as five out of the thousands upon thousands of workers employed at the companies.)

The other CEOs? A mix of founders who started their own corporations, longtime employees who began their career on the management rung after graduating from business school, and, in what’s becoming a rising trend, those who started off in the management tier of other corporations, only to bounce around as a sort of “free agent CEO.” (This bouncing around goes beyond the CEO; as a study into the career paths of top management showed, “[t]hirteen of the Fortune 100 companies … had no top executives who had begun their careers there.”)

According to the most recent report by Strategy&, a consulting firm that’s been following CEO turnover for the past 16 years, companies are now more likely than ever before to bring in “outsider CEOs” as opposed to hiring from within. Over the past four years, 22 percent of CEOs at the 2,500 largest companies were hired away from other companies—a jump from 16 percent in the previous four-year span. Why is this a problem? For starters, it’s bad business.

In a 2011 study, Wharton School professor Matthew Bidwell examined the effectiveness of those who were hired from within as opposed to those poached from other places. Here were the key points in his abstract:

I find that workers promoted into jobs have significantly better performance for the first two years than workers hired into similar jobs and lower rates of voluntary and involuntary exit. Nonetheless, the external hires are initially paid around 18 percent more than the promoted workers and have higher levels of experience and education.

(Some evidence shows that the percentage of CEO “inside hires” actually went up over the past decade; Spencer Stuart, a consulting firm based in Chicago, found that the percentage of external hires dropped from 34 percent in 2004 to 16 percent in 2015. However, during that same period of time, the rate of CEO turnover decreased as well.)

But beyond the markers of what makes a move “successful” in terms of a company’s bottom line, the true cost of the “stock clerk to CEO” myth is that it holds up an unrealistic possibility as potential. It is, after all, just another version of the false idea of American “bootstrapping.” This nonsense — which wormed its way into our culture starting with the Horatio Alger stories of the 1890s, featuring poor boys who used nothing but grit and determination to pick themselves out of squalor into “success” — has long been debunked. If you’re born poor, the game’s rigged against you.

Pew’s 2012 “Pursuing the American Dream” study showed that more than 40 percent of Americans raised in the bottom quintile of income stay there as adults, while 70 percent that start there don’t rise above the middle of the income ladder. More recently, a study by the Equality of Opportunity Project showed that the possibility of “upward mobility” depends almost entirely on the neighborhood one happens to live in. And yet, the rare exceptions are signal-boosted as far as the media’s reach will go. (See: any article about any of the five CEOs mentioned above.)

When stories of “stock clerk to CEO” are trotted out, they should be considered “weird news,” same as frogs falling out of the sky. When they’re not disclaimed as the same thing as winning the lottery, they act as subtle propaganda for the corporate elite. They’re saying, “you too can make it to the top rung of the ladder, if only you put in some extra elbow grease.” They’re hinting that all those overtime hours will be worth it in the long run.

The truth of the “stock clerk to CEO” myth is that it’s difficult to motivate people to work long hours at low pay without giving them an unrealistic dream to look forward to down the road.