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Powerful CEOs and their Impact on Corporate Performance


Heitor Almeida


University of Illinois at Urbana-Champaign; National Bureau of Economic Research (NBER)

Renee B. Adams


University of New South Wales; Financial Research Network (FIRN); European Corporate Governance Institute (ECGI)

Daniel Ferreira


London School of Economics & Political Science (LSE) - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)
September 10, 2003

AFA 2004 San Diego Meetings; EFA 2002 Berlin Meetings Discussion Paper

Abstract:     
Executives can only impact firm outcomes if they have influence over crucial decisions. Based on this idea we develop and test the hypothesis that firms whose CEOs have more decision-making power should experience more variability in performance. We construct proxies for the CEO's power to influence decisions and show that stock returns are significantly more variable for firms run by powerful CEOs. We find similar results using alternative measures of performance. These findings suggest that the interaction between executive characteristics and organizational variables may have important consequences for firm performance.

Number of Pages in PDF File: 36

JEL Classification: G34, G12

working papers series


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Date posted: November 11, 2003  

Suggested Citation

Almeida, Heitor, Adams, Renee B. and Ferreira, Daniel, Powerful CEOs and their Impact on Corporate Performance (September 10, 2003). AFA 2004 San Diego Meetings; EFA 2002 Berlin Meetings Discussion Paper. Available at SSRN: http://ssrn.com/abstract=312184 or http://dx.doi.org/10.2139/ssrn.312184

Contact Information

Heitor Almeida (Contact Author)
University of Illinois at Urbana-Champaign ( email )
515 East Gregory Drive
4037 BIF
Champaign, IL 61820
United States
217-3332704 (Phone)
HOME PAGE: http://www.business.illinois.edu/FacultyProfile/faculty_profile.aspx?ID=11357
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Renée B. Adams
University of New South Wales ( email )
Sydney, NSW 2052
Australia
+61(2)93854280 (Phone)

Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Daniel Ferreira
London School of Economics & Political Science (LSE) - Department of Finance ( email )
Houghton Street
London, WC2A 2AE
United Kingdom
(+44) 20 7955 7544 (Phone)
HOME PAGE: http://personal.lse.ac.uk/FERREIRD/
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Feedback to SSRN (Beta)


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