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What's Happened over the Past 10 Years to the Selection of Retired CEOs as Board Members?

Changmin Lee ()

No 2007-007, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

Abstract: I analyze directorships held by CEOs who retired during 1989-1993 and during 1998-2002. My results suggest that retired CEOs became more popular on boards. Also, although pre-retirement accounting performance helps explain the number of outside directorships a retired CEO held in the 1989-1993 sample as Brickley, Linck, and Coles (1999) found, it does not in the 1998-2002 sample. Third, a company's stock performance during a CEO's tenure affects whether he became an inside director of that company after retirement. A 25% change in stock price performance increased the probability by 11% in the 1989-1993 sample, and 51% in the 1998-2002 sample. Finally, if a retired CEO worked in a regulated industry, his probability of serving at least one outside directorship fell by 34% in the 1989-1993 sample, and 24% in the 1998-2002 sample.

Keywords: Corporate governance; Board of Director; Deregulation (search for similar items in EconPapers)
JEL-codes: G34 G38 L10 L51 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2007-07, Revised 2008-10
New Economics Papers: this item is included in nep-age, nep-bec, nep-his and nep-reg
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