The Big Birthday Crisis: Exploring the Influence of 9-Ending Ages on CEO Behavior and Firm Outcomes

Abstract

This paper provides evidence that firms underperform when their CEOs approach a new decade in life. Research in psychology suggests that individuals frequently enter a temporary period of crisis in 9-ending ages, which is characterized by introspection and self-assessment. I hypothesize that this comes with a diversion from professional responsibilities as CEOs. Consistent with this reasoning, I show that during 9-ending ages of CEO life, firms have decreased operating performance, firm value and long-term investments. I also find that CEOs are more authentic during conference calls, which is consistent with the idea that being in a 9-ending age is associated with deeper reflection that elicits closer alignment with personal values.

Keywords: Firm performance; CEO behavior; CEO age; temporal landmarks; 9-ending age

JEL Classification: G30, G31, G34, J24, M12