Founder CEOs and Utility Firms’ Financial Choices

Md Asif Ul Alam (), Md Maruf Ul Alam and Toufiq Nazrul
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Md Asif Ul Alam: Department of Business Administration, College of Business, Kutztown University of Pennsylvania, Kutztown, PA 19530, USA
Md Maruf Ul Alam: Department of Finance, Sam M. Walton College of Business, University of Arkansas, Fayetteville, AR 72701, USA
Toufiq Nazrul: Schroeder Family School of Business Administration, University of Evansville, Evansville, IN 47722, USA

JRFM, 2025, vol. 18, issue 10, 1-16

Abstract: Founder CEOs lead a significant number of public U.S. firms, and these firms often differ from other firms led by non-founder CEOs in terms of various important firm characteristics. In our paper, we investigate the financial choices of founder-CEO-led firms and non-founder-CEO firms in a utility industry setting within the context of the U.S. Our results show that founder CEO status has a significant positive influence on financial choices (cash holdings, investment ratio, equity ratio, and interest coverage) of utility companies. After addressing potential causality and performing additional robust measures, our findings still hold and suggest that CEO origin is important for explaining variation in financial choices of utility companies. Overall, our findings make a valuable contribution to the literature on utility firms, founder CEOs, and CEO characteristics by connecting them through an angle that is previously unexplored.

Keywords: founder CEO; financial choices; utility company; corporate governance; firm performance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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