The market for CEOs

Peter Cziraki and Dirk Jenter

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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: G30 G34 M12 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2021-06-14
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-hrm
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http://eprints.lse.ac.uk/118872/ Open access version. (application/pdf)

Related works:
Working Paper: The Market for CEOs (2021)
Working Paper: The Market for CEOs (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:118872

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