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CEO Mobility and the CEO-Firm Match: Evidence from CEO Employment History

55 Pages Posted: 1 Mar 2011 Last revised: 18 Jul 2012

Harley E. Ryan Jr.

Georgia State University - Department of Finance

Lingling Wang

University of Connecticut - Department of Finance

Date Written: July 16, 2012

Abstract

We use data on the employment histories of CEOs to examine the relation between the CEO’s labor-market mobility and the CEO-firm match. Mobile CEOs match with firms that exhibit poor performance, face revenue shocks, and offer risk-sensitive compensation. At these firms, mobile CEOs increase shareholder value, improve operating performance, increase performance volatility, increase idiosyncratic equity risk, and alter asset structure. Our results suggest that mobile CEOs are fundamentally different from stationary CEOs and that the board recognizes these differences ex ante. The firm’s needs and the CEO’s attributes influence the CEO-firm match, and this match influences firm value and strategy.

Keywords: CEO Experience, CEO-firm Match, Firm Performance, Firm Policies, Employment History

JEL Classification: G30, G32, G34, J6

Suggested Citation

Ryan, Harley E. and Wang, Lingling, CEO Mobility and the CEO-Firm Match: Evidence from CEO Employment History (July 16, 2012). Available at SSRN: https://ssrn.com/abstract=1772873 or http://dx.doi.org/10.2139/ssrn.1772873

Harley E. Ryan Jr.

Georgia State University - Department of Finance ( email )

University Plaza
35 Broad Street, Suite 1221
Atlanta, GA 30303-3083
United States
404-651-2674 (Phone)
404-651-2630 (Fax)

Lingling Wang (Contact Author)

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States

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