The Market for CEOs: Evidence from Private Equity

Paul Gompers, Steven N. Kaplan and Vladimir Mukharlyamov

No 30899, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Most research on the CEO labor market studies public company CEOs while largely ignoring CEOs in private equity (PE) funded companies. We fill this gap by studying the market for CEOs among U.S. companies purchased by PE firms in large leveraged buyout transactions. 71% of those companies hired new CEOs under PE ownership. More than 75% of the new CEOs are external hires with 67% being complete outsiders. These results are strikingly different from studies of public companies, particularly, Cziraki and Jenter (2022) who find that 72% of new CEOs in S&P 500 companies are internal promotions. The most recent experience of 67% of the outside CEOs was at a public company with almost 50% of external hires having some previous experience at an S&P 500 firm. We estimate the total compensation of buyout CEOs and find that it is much higher than that of CEOs of similarly sized public companies and slightly lower than that of S&P 500 CEOs. Overall, our results suggest that the broader market for CEOs is active and that, at least for PE funded portfolio companies, firm-specific human capital is relatively unimportant.

JEL-codes: G24 G3 G32 J30 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-cfn, nep-fmk, nep-hrm and nep-lma
Note: CF LS
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w30899.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:30899

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w30899

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().