CEO Health

67 Pages Posted: 14 Apr 2020 Last revised: 22 Nov 2021

See all articles by Matti Keloharju

Matti Keloharju

Aalto University School of Business; Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Samuli Knüpfer

Aalto University School of Business; BI Norwegian Business School; Research Institute of Industrial Economics (IFN)

Joacim Tåg

Research Institute of Industrial Economics (IFN)

Date Written: November 19, 2021

Abstract

Using comprehensive data on 28 cohorts in Sweden, we analyze CEO health and its determinants and consequences. We find CEOs are in much better health than the population and on par with other high-skill professionals. These results apply in particular to mental health and to CEOs of larger companies. We explore three channels which could account for CEOs’ robust health. First, we find health predicts appointment to a CEO position. Second, the CEO position has no discernible impact on the health of its holder. Third, poor health is associated with greater CEO turnover. Here, both contemporaneous health and health at the time of appointment matter. These results are consistent with boards appointing CEOs with health robust enough to withstand the pressures of the job, correcting mismatches occurring at the time of appointment, and responding expediently to health shocks. Poor CEO health also has adverse consequences: we find a statistically significant association between mental health and corporate performance. This result can be traced to smaller-firm CEOs, for whom a one standard deviation deterioration in mental health translates into a performance reduction of 8% relative to the mean. These results suggest board oversight has enough friction for CEO health to affect performance.

Keywords: CEOs, Corporate Governance, Executives, Mental Health, Physical Health

JEL Classification: G34; I12; J24; J31

Suggested Citation

Keloharju, Matti and Knüpfer, Samuli and Tåg, Joacim, CEO Health (November 19, 2021). IFN Working Paper No. 1326, Available at SSRN: https://ssrn.com/abstract=3560071 or http://dx.doi.org/10.2139/ssrn.3560071

Matti Keloharju

Aalto University School of Business ( email )

P.O. Box 21210
AALTO, FI-00076
Finland

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Samuli Knüpfer

Aalto University School of Business

P.O. Box 21210
AALTO, 00076
Finland

HOME PAGE: http://www.samuliknupfer.com

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Research Institute of Industrial Economics (IFN)

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Joacim Tåg (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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