Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236685 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9143
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
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.
Subjects: 
CEO labor markets
CEO-firm matching
assignment models
CEO turnover
CEO compensation
JEL: 
D22
G34
J23
M12
M51
Document Type: 
Working Paper
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