Cfo Co-Option and Corporate Debt Maturity

38 Pages Posted: 14 Oct 2022

See all articles by Yiwei Li

Yiwei Li

University of Essex, EBS

Mengying Zhao

Renmin University of China


This paper examines whether the relative power in the CEO–CFO relationship influences the corporate debt maturity structure. In particular, we define CFO co-option as the CFO appointed after the incumbent CEO assumed office. We hypothesize that firms with co-opted CFOs face greater pressure from CEOs and have allegiance to them. We find that firms with co-opted CFOs have a positive effect on longer-term maturity debt and this effect is more pronounced among firms with weak external monitoring, CEOs near retirement, and financially unconstrained firms. A number of robustness tests are also consistent with our proposition. This paper contributes to the literature on how dynamics between executives can impact corporate policies.

Keywords: Co-option, CFO, Debt maturity

Suggested Citation

Li, Yiwei and Zhao, Mengying, Cfo Co-Option and Corporate Debt Maturity. Available at SSRN:

Yiwei Li (Contact Author)

University of Essex, EBS ( email )

University of Essex Wivenhoe Park
Essex business school
Colchester, CO4 3SQ
United Kingdom

Mengying Zhao

Renmin University of China ( email )

Room B906
Xianjin Building
Beijing, 100872

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