Accounting and Finance Seminar - Dirk Jenter (LSE)

12 February 2020, 12.00 PM - 12 February 2020, 1.15 PM

G.15, 15-19 Tyndalls Park Road

G.15, 15-19 Tyndalls Park Road

Title - "Hiring CEOs"

Abstract- We study CEO hires by large publicly-traded US firms, document the new hires’ prior connections to the firm, and explore how hiring choices are determined. Our results suggest that the CEO labor market is far from perfectly competitive and that firms hire from a small pool of candidates. More than 80% of new CEOs are insiders, i.e., current or former employees or board members. More than 90% of new CEOs are executives firms are already familiar with – current or former employees or board members, or executives its directors have worked with. Firms raid CEOs of other firms in only 3% of cases, implying a lack of talent reallocation across firms. Pay differences appear too small to explain these hiring choices. The evidence instead suggests that firm-specific human capital and personal connections determine CEO hiring.

Contact information

http://personal.lse.ac.uk/jenter/

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