Tailspotting: Identifying and Profiting from CEO Vacation Trips

56 Pages Posted: 31 Mar 2012 Last revised: 6 Apr 2012

See all articles by David Yermack

David Yermack

New York University (NYU) - Stern School of Business

Multiple version iconThere are 3 versions of this paper

Date Written: March 2012

Abstract

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.

Suggested Citation

Yermack, David, Tailspotting: Identifying and Profiting from CEO Vacation Trips (March 2012). NBER Working Paper No. w17940, Available at SSRN: https://ssrn.com/abstract=2031928

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