We provide evidence that CEO tenure exhibits an inverted U-shaped relation with firm value and M&A announcement returns, consistent with benefits (e.g., experience, learning, relations) and costs (e.g., CEO-firm mismatch, entrenchment, reluctance to change) arising over a CEO’s time in office. Depending on the dynamics of a firm’s economic environment which affect the cost-benefit relation of tenure, we find economically meaningful variation in the point in time at which costs start to outweigh benefits. The documented CEO life cycle is robust to a large set of robustness tests, including various alternative explanations, CEO-firm fixed effects, and nonparametric estimations, and is supported by an analysis of CEO sudden deaths. Economic recessions and regulatory changes in corporate governance as exogenous shocks to the cost-benefit relation of tenure further support our findings.
An den geregelten Organen wie Verwaltungsrat und GV vorbei finden sich immer mehr "Aktivisten", die an den Finanzmärkten strategisch agieren und hier und da Unterstützung erhalten. Diese Gruppen profitieren von der weitgehenden Passivität des Privaten und auch des institutionellen Investors sowie der mangelhaften Transparenz mancher Unternehmung gegenüber den Eigenkapitalgebern.
We investigate the valuation effects of leadership structure in Switzerland where, in contrast to the U.S., a separation of the CEO and chairman functions is common. Consistent with the majority of prior research focusing on the U.S., we find no evidence of a systematic and significant difference in valuation between firms with combined and firms with separated functions. We also investigate whether leadership structure is related to firm-level corporate governance characteristics and find a similar curvilinear relationship between leadership structure and managerial shareholdings as is observed between firm value and managerial shareholdings. A possible interpretation is that agency costs associated with a combined function are mitigated by a higher incentive alignment of the CEO/chairman through an adequate level of managerial shareholdings.
Style Investing - In schweren Börsenzeiten sind aktives Ausnützen von
Renditeunterschieden zwischen Märkten oder Sektoren sowie unterschiedliche
Anlagestile viel versprechende Ansätze. Illusionen sind aber fehl am Platz. Die damit verbundenen Risiken sollte jeder Anleger kennen.
