CEO vs. Owner: The Key Differences

Small businesses and large enterprises have one thing in common: the person at the top is ultimately responsible for the success or failure of the organisation. The chief executive officer, or CEO, of larger organisations, particularly publicly traded companies, is the highest-ranking executive, whereas small enterprises are often formed and operated by their owners.

When comparing the positions of CEO and owner, there are numerous parallels and significant contrasts. For example, critical thinking and interpersonal communication abilities are generally required of CEOs and business owners. They each have important responsibilities, such as hiring personnel for high-level jobs in respective companies.

However, there is a significant difference in how they approach obligations. Owners, for example, frequently assign financial management to others, while they may retain some responsibility themselves. Corporate CEOs, who are primarily concerned with market prospects, competitors, and partnerships, are unable to do so. As a result, CEOs are more prone to shift tactical tasks to subordinates.

Comparing Owners and CEOs

According to the HMRC, a business with assets of less than £10 million is classified as small, while those with more are classified as moderate to large. Whether the company is a traditional brick-and-mortar store or a worldwide internet enterprise, size counts since it dictates the management structure.

Employees in huge corporations, for example, report to their CEOs. CEOs, on the other hand, work for someone else: the board of directors of their company and, in publicly traded corporations, the shareholders. Owners, on the other hand, often have entire control over their small enterprises and are only answerable to their customers.

The CEO is the person in charge of the company’s overall day-to-day management and is usually appointed by the board of directors. Owner is a job title gained by solo proprietors and entrepreneurs who have complete ownership of a business but are not responsible for its administration. However, the job titles of CEO and owner are not mutually exclusive; CEOs can be owners, and owners can be CEOs. A board of directors does not always hold CEOs accountable.

What Does a CEO Do?

Chief financial officers, or CFOs, are frequently delegated by CEOs to oversee the company’s finances, which are typically in the millions or hundreds of millions of dollars. This is especially true in publicly traded organisations, where CEOs are ultimately responsible for delivering shareholder returns. This entails legal obligations to shareholders, such as the responsibility of care and loyalty. Such legal responsibilities are meant to encourage transparency and confidence, as well as to safeguard critical business stakeholders.

The board of directors provides advise to CEOs as the top executive of large corporations on the company’s vision and goals. In the case of private enterprises, CEOs are directed by the company’s owner(s). In any case, CEOs must outsource day-to-day management tasks to other senior executives in order to focus on business initiatives that will drive success.

What Does a Business Owner Do?

A person is the owner of a firm if he or she owns 100% of it. A co-owner is someone who has a business partner who has equity in the company. In a nutshell, owners are responsible for all aspects of a business, including operations, sales, and marketing.

Owners must be willing to delegate responsibilities in order to build their business. This is where the ability to hire and develop people becomes crucial. Owners, like CEOs, want to ensure their company’s financial health, thus they must devise revenue-growth initiatives. As the company grows, owners may need to engage additional executives to oversee essential operations such as accounting and marketing. As a business grows, proprietors may be given the formal title of CEO. Owners, unlike CEOs, who must account to boards of directors and shareholders, are ultimately responsible solely to themselves.

CEO Salary

A CEO’s remuneration is influenced by a number of things. CEO wages vary widely depending on the size of the company, its location, and its industry. As of May 2020, the median annual compensation for top executives was $185,900, according to the US Bureau of Labor Statistics (BLS). Higher compensation come with greater responsibilities, and most CEOs have a lot of knowledge and experience to draw on in order to address business difficulties and lead their firms.

Business Owner Salary

It’s difficult to establish an average business owner’s compensation because enterprises vary in size and scope. The compensation of one business owner to the next might vary greatly depending on the size of the company, % ownership or profit sharing, and expenses. According to PayScale, as of October 2021, small business owners earned a median pay of $64,800 per year, with the top reported earning $156,000 per year, a figure that generally rises with medium to large firms.