Shareholder perceptions of the changing impact of <scp>CEOs</scp>: Market reactions to unexpected <scp>CEO</scp> deaths, 1950–2009

Quigley, Timothy J.; Crossland, Craig; Campbell, Robert

doi:10.1002/smj.2504

Cited by 70 publications

(42 citation statements)

References 48 publications

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“…To compile our sample of sudden executive (CEOs, chairmen and presidents) deaths for the period 1980 to 2012, we use the data from Salas (2010), who identifies suddenly deceased CEOs, chairmen and presidents, and complement it with data on sudden CEO deaths from Quigley, Crossland, and Campbell (2016). The sample period in the two aforementioned studies ends in 2008 and 2009, respectively.…”

Section: Sample Selection and Datamentioning

confidence: 99%

“…In specifications 3and 4, we address time trends as another alternative explanation. Using a sample of executive sudden deaths between 1950 and 2009, Quigley, Crossland, and Campbell (2016) provide evidence that the value of executives and/or their impact on the firms they run has increased over time. Given the positive time trend of the general ability index we report in Figure 2, our evidence of a positive valuation effect of general managerial skills might just reflect the generally increasing value (and impact) of executives over time.…”

Section: Alternative Explanationsmentioning

confidence: 99%

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Are Generalists Beneficial to Corporate Shareholders? Evidence from Sudden Deaths

et al. 2017

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This study documents a positive, economically meaningful impact of executives' general managerial skills on shareholder value. Examining 171 sudden executive deaths over thirty years, we find that a one-standarddeviation increase in the general ability index corresponds to at least a 1.5 percentage point decrease in abnormal stock returns to death announcements. Generalists are found to be significantly more valuable for firms with fewer growth prospects where difficult tasks (e.g., restructurings) need to be performed and adaptations to changing business environments become necessary. Our results provide a market-based explanation for the documented generalist hiring premium and the increasing share of generalists.

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Section: Sample Selection and Datamentioning

confidence: 99%

Section: Alternative Explanationsmentioning

confidence: 99%

Are Generalists Beneficial to Corporate Shareholders? Evidence from Sudden Deaths

et al. 2017

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“…We are grateful to Tim Quigley for sharing the information on unexpected CEO deaths used in Quigley et al ().…”

mentioning

confidence: 99%

CEO career horizon, corporate governance, and real options: The role of economic short‐termism

Lee

Park

Folta

2018

Strategic Management Journal

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Research Summary: Combining studies on real options theory and economic short‐termism, we propose that, depending on CEOs’ career horizons, CEOs have heterogeneous interests in strategic flexibility, and thus, have different incentives to make real options investments. We argue that compared to CEOs with longer career horizons, CEOs with shorter career horizons will be less inclined to make real options investments because they may not fully reap the rewards during their tenure. In addition, we argue that long‐term incentives and institutional ownership will mitigate the relationship between CEOs’ career horizons and real options investments. U.S. public firms as an empirical setting produced consistent evidence for our predictions. Our study is the first to theoretically explain and empirically show that a CEO's self‐seeking behavior will impact real options investments. Managerial Summary: This article helps to explain how a CEO's self seeking‐behavior may shape a firm's real option investment, which could result in different level of strategic flexibility. We argue that CEOs with short career horizons have less time to exercise their firms’ real options, which should lower the investments in the firms’ real options portfolios relative to CEOs with long career horizons. We study a sample of U.S. public firms and find strong evidence that a CEO's expected tenure in the firm is positively related to the real options investments at the firm level. We find that this agency issue can be mitigated by adopting appropriate corporate governance mechanisms such as long‐term incentives and institutional investors.

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“…Even owners have demonstrated a greater significance and influence for executives on firm outcomes. In a recent study to unexpected CEO deaths, Quigley, Crossland, and Campbell (2017) empirically showed that shareholders react to unexpected CEO deaths in an amplified way that clearly confirms the belief that CEOs have become very influential particularly to firms' outcomes. Therefore, there is an ample of scientific support and empirical evidence for the importance of executives and their effect on firm performance when they are accorded with greater levels of discretion.…”

Section: Comments On the Importance Of Managerial Discretion In Corpomentioning

confidence: 69%

Reaffirming the importance of managerial discretion in corporate governance: a comment on Andersen (2017)

Youssef

Teng

2019

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Purpose: A recent study by Jon Aarun Andersen argued that corporate governance research will improve if it abandons the concept of managerial discretion due to the lack of an empirical definition and measurement of the concept. In this paper, we comment on Andersen (2017) by suggesting that the theoretical reasoning employed in his work is not adequate and that the concept of managerial discretion is one of the core dimensions that should be studied when researching corporate governance.Design/methodology/approach: This paper uses theoretical frameworks from recent literature, definitions and empirical studies on the concept of managerial discretion and corporate governance.Findings: Several studies have empirical tested and measured the concept of managerial discretion and that other attempts have provided validity and reliability of the concept, other have showed the direct impact of discretion on firm performance. Practical implications:Research on managerial discretion provides owners and board of directors a clear advice on how much discretion can be granted to top executives by taking into consideration the different dimensions of the external and internal environment.Originality/value: This paper concludes that corporate governance research will not improve if it abandons the concept of managerial discretion.

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Shareholder perceptions of the changing impact of CEOs: Market reactions to unexpected CEO deaths, 1950–2009

Cited by 70 publications

References 48 publications

Are Generalists Beneficial to Corporate Shareholders? Evidence from Sudden Deaths

Are Generalists Beneficial to Corporate Shareholders? Evidence from Sudden Deaths

CEO career horizon, corporate governance, and real options: The role of economic short‐termism

Reaffirming the importance of managerial discretion in corporate governance: a comment on Andersen (2017)

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