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The Market for CEOs

Peter Cziraki and Dirk Jenter ()

No 9143, CESifo Working Paper Series from CESifo

Abstract: We study the market for CEOs of large publicly-traded US firms, analyze new CEOs’ prior connections to the hiring firm, and explore how hiring choices are determined. Firms are hiring from a surprisingly small pool of candidates. More than 80% of new CEOs are insiders, defined as current or former employees or board members. Boards are already familiar with more than 90% of new CEOs, as they are either insiders or executives who directors have previously worked with. There are few reallocations of CEOs across firms – firms raid CEOs of other firms in only 3% of cases. Pay differences appear too small to explain these hiring choices. The evidence suggests that firm-specific human capital, asymmetric information, and other frictions have first-order effects on the assignment of CEOs to firms.

Keywords: CEO labor markets; CEO-firm matching; assignment models; CEO turnover; CEO compensation (search for similar items in EconPapers)
JEL-codes: D22 G34 J23 M12 M51 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-cwa, nep-hrm, nep-lma and nep-sbm
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