56 Pages Posted: 16 Mar 2012 Last revised: 13 Dec 2013
Date Written: November 25, 2013
This paper shows close connections between CEOs’ absences from headquarters and corporate news disclosures. I identify CEO absences by merging corporate jet flight histories with records of CEOs’ property ownership near leisure destinations. I find that CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. When CEOs are away, companies announce less news than usual, mandatory disclosures are more likely to occur late, and stock prices exhibit sharply lower volatility. Volatility increases when CEOs return to work. CEOs spend fewer days out of the office when their ownership is high and when the weather is bad at their vacation homes.
Keywords: Disclosure, corporate jets, CEO vacations
JEL Classification: G14, G34
Suggested Citation: Suggested Citation
Yermack, David, Tailspotting: Identifying and Profiting from CEO Vacation Trips (November 25, 2013). NYU Law and Economics Research Paper No. 12-07. Available at SSRN: https://ssrn.com/abstract=2022813 or http://dx.doi.org/10.2139/ssrn.2022813
By Jay Hartzell