CEO Careers in Regulated Environments: Evidence from Electric and Gas Utilities
Posted: 5 May 2002 Last revised: 19 Apr 2015
We compare CEOs of electric and gas utility firms to CEOs of unregulated firms. Utility CEOs tend to be older when appointed to office, have less prestigious educational backgrounds, and are more likely to have a legal background. Despite these differences, the evidence also indicates that the likelihood of utility CEO turnover is at least as sensitive to stock performance as the likelihood of turnover among CEOs of unregulated firms. We find no convincing evidence that utility CEOs stay in office longer than their unregulated counterparts, although they are less likely to be overtly forced from office or replaced by an executive from outside the firm. Finally, the evidence suggests that regulatory expertise is valued in the selection of new utility CEOs.
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