23 Pages Posted: 22 May 2007 Last revised: 14 Apr 2013
Date Written: May 22, 2007
I analyze directorships held by CEOs who retired during 1989-1993 and during 1998-2002. My results suggest that retired CEOs became more popular on boards. Also, although pre-retirement accounting performance helps explain the number of outside directorships a retired CEO held in the 1989-1993 sample as Brickley, Linck, and Coles (1999) found, it does not in the 1998-2002 sample. Third, a company's stock performance during a CEO's tenure affects whether he became an inside director of that company after retirement. A 25% change in stock price performance increased the probability by 11% in the 1989-1993 sample, and 51% in the 1998-2002 sample. Finally, if a retired CEO worked in a regulated industry, his probability of serving at least one outside directorship fell by 34% in the 1989-1993 sample, and 24% in the 1998-2002 sample.
Keywords: Corporate governance, Board of director, Deregulation
JEL Classification: G34, G38, L10, L51
Suggested Citation: Suggested Citation
Lee, Changmin, What's Happened over the Past 10 Years to the Selection of Retired CEOs as Board Members? (May 22, 2007). CAEPR Working Paper No. 2007-007. Available at SSRN: https://ssrn.com/abstract=988162 or http://dx.doi.org/10.2139/ssrn.988162
By Kevin Murphy