The Political Polarization of Corporate America ✩

Abstract

U.S. executives are increasingly segregating by political party. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between 2008 and 2022. We identify key drivers of this trend, including growing segregation among executives within geographies and industries. Executives whose political views differ from the majority of their team are more likely to depart, contributing to the increasing polarization. Furthermore, an analysis of insider trading behavior suggests that intensifying partisan disagreement among executives may further fuel this segregation. Across all of these findings, we observe a significant shift in the dynamics around the 2016 U.S. presidential election, which marks an inflection point in the political polarization of corporate leadership.

Keywords: political polarization, partisanship, executives, management teams, governance, diversity

JEL Classification: G30, G34, M12, M14