CEO Careers in Regulated Environments: Evidence from Electric and Gas Utilities

Posted: 5 May 2002 Last revised: 19 Apr 2015

See all articles by Charles J. Hadlock

Charles J. Hadlock

Michigan State University - The Eli Broad College of Business and The Eli Broad Graduate School of Management

D. Scott Lee

University of Nevada, Las Vegas - Lee Business School

Robert Parrino

University of Texas at Austin - Department of Finance

Abstract

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.

Suggested Citation

Hadlock, Charles J. and Lee, D. Scott and Parrino, Robert, CEO Careers in Regulated Environments: Evidence from Electric and Gas Utilities. Journal of Law & Economics, Vol. 45, No. 2, Part 1, Available at SSRN: https://ssrn.com/abstract=305701

Charles J. Hadlock (Contact Author)

Michigan State University - The Eli Broad College of Business and The Eli Broad Graduate School of Management ( email )

315 Eppley Center
East Lansing, MI 48824-1121
United States
517-353-9330 (Phone)
517-432-1080 (Fax)

D. Scott Lee

University of Nevada, Las Vegas - Lee Business School ( email )

4505 S. Maryland Parkway
Box 456008
Las Vegas, NV 89154-6008
United States
702-895-2526 (Phone)
702-895-4630 (Fax)

HOME PAGE: http://faculty.unlv.edu/slee

Robert Parrino

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-5788 (Phone)
512-471-5073 (Fax)

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