CEO Ownership and Stock Market Performance
Speaker
Abstract
| We examine the relationship between CEO ownership and stock market performance. Firms in which the CEO voluntarily holds a non-trivial fraction of the company’s stock outperform the market significantly after controlling for traditional risk factors. The effect is most pronounced among firms that are characterized by large managerial discretion of the CEO. The abnormal returns we document are one potential explanation why many CEOs hold a large fraction of their own company’s stock. We also explore several potential explanations why publicly available information on managerial ownership is not fully reflected in prices but leads to long term abnormal returns. |
| Contact information: |
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Myra Lissenberg |
