Does the Market Value CEO Styles?
8 Pages Posted: 17 May 2016
Date Written: May 12, 2016
We 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.
Keywords: CEO Turnover, Announcement Return, Management Style, Recession, Executive Labor Market
JEL Classification: G30, J24, J44, M51
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