What Happens to CEOs After They Retire? New Evidence on Career Concerns, Horizon Problems, and CEO Incentives

48 Pages Posted: 23 Jun 1998 Last revised: 4 Mar 2018

See all articles by James A. Brickley

James A. Brickley

University of Rochester - Simon Business School

Jeffrey L. Coles

University of Utah - Department of Finance

James S. Linck

Southern Methodist University (SMU) - Finance Department

Date Written: December 1, 1998

Abstract

This paper provides evidence on a previously unidentified source of managerial incentives: concerns about post-retirement board service. Both the likelihood that a retired CEO serves on his own board two years after departure, as well as the likelihood of serving as an outside director on other boards, are positively and strongly related to his performance while CEO. Retention on the CEO's own board depends primarily on stock returns, while service on outside boards is better explained by accounting returns. The evidence also suggests that firms consider ability in choosing board members.

JEL Classification: G30, G32, J33

Suggested Citation

Brickley, James A. and Coles, Jeffrey L. and Linck, James S., What Happens to CEOs After They Retire? New Evidence on Career Concerns, Horizon Problems, and CEO Incentives (December 1, 1998). Journal of Financial Economics (JFE), Vol. 52, 1999, Simon School of Business Working Paper FR 97-10, SMU Cox School of Business Research Paper, Available at SSRN: https://ssrn.com/abstract=567164 or http://dx.doi.org/10.2139/ssrn.567164

James A. Brickley

University of Rochester - Simon Business School ( email )

Carol Simon Hall 3-160L
Rochester, NY 14627
United States
585-275-3433 (Phone)
585-442-6323 (Fax)

Jeffrey L. Coles

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States
801-587-9093 (Phone)

James S. Linck (Contact Author)

Southern Methodist University (SMU) - Finance Department ( email )

United States

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