Does the Market Value CEO Styles?
American Economic Review · 2016 · Volume 106 · Issue 5
Abstract
We study how investors perceive the skill set that different types of CEOs bring into their companies. We compare CEOs who started their careers during a recession with other CEOs. We show that the announcement return around the appointment of a recession CEO is very significant and positive, and this positive market reaction is driven by cases where a recession CEO replaces a non-recession CEO. Our results indicate that the market assigns a positive and economically meaningful value to a recession CEO, suggesting that there is a limited supply of these types of CEOs in the executive labor market.
Keywords
Business Fluctuations, Cycles, Information and Market Efficiency, Event Studies, Insider Trading, Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill, Mergers, Acquisitions, Restructuring, Voting, Proxy Contests, Corporate Governance, Personnel Management, Executives, Executive Compensation, Personnel Economics: Compensation and Compensation Methods and Their Effects
Enable JavaScript for citation tools and additional paper interactions.