FORE! An Analysis of CEO Shirking

Lee Biggerstaff (), David C. Cicero () and Andy Puckett ()
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Lee Biggerstaff: Department of Finance, Farmer School of Business, Miami University, Oxford, Ohio 45056
David C. Cicero: Department of Economics, Finance and Legal Studies, University of Alabama, Tuscaloosa, Alabama 35487; and Department of Finance, Raymond J. Harbert College of Business, Auburn University, Auburn, Alabama 36849
Andy Puckett: Department of Finance, Haslam College of Business, University of Tennessee, Knoxville, Tennessee 37996

Management Science, 2017, vol. 63, issue 7, 2302-2322

Abstract: Using golf play as a measure of leisure, we provide direct evidence that some CEOs shirk their responsibilities to the detriment of firm shareholders. CEOs with lower equity-based incentives play more golf and those that golf the most are associated with firms that have lower operating performance and firm values. Numerous tests accounting for the possible endogenous nature of these relations support a conclusion that CEO shirking causes lower firm performance. New CEOs and those at firms with more independent boards are more likely to be replaced when they shirk, but those with long tenures or less independent boards appear to avoid discipline.

Keywords: finance; corporate finance; economics; behavior and behavioral decision making (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:63:y:2017:i:7:p:2302-2322

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