Does the Market Value CEO Styles?
- (pp. 262-66)
AbstractWe 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.
CitationSchoar, Antoinette, and Luo Zuo. 2016. "Does the Market Value CEO Styles?" American Economic Review, 106 (5): 262-66. DOI: 10.1257/aer.p20161031
- E32 Business Fluctuations; Cycles
- G14 Information and Market Efficiency; Event Studies; Insider Trading
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- M12 Personnel Management; Executives; Executive Compensation
- M52 Personnel Economics: Compensation and Compensation Methods and Their Effects