What Is the Impact of CEO Characteristics and Ownership on Firm’s Return on Investment (ROI)?
26 Pages Posted: 24 May 2019
Date Written: April 24, 2019
In this paper, the main objective is to examine whether CEO characteristics have an impact on firm performance. Does CEO’s age, gender, compensation, or ownership influence return on investment? The data consists of 19868 observations that only include firms on the S&P 500 between the period 1992 to 2019. By using a linear regression model, the results show that CEO characteristics have an impact on firm performance. CEO gender and ownership are positively correlated with ROI while CEO age and compensation are uncorrelated with ROI. However, only compensation and ownership have significant effect on the performance of the firm. Overall, firms should consider the candidates’ characteristics during the recruitment process of a new CEO.
Keywords: CEO’s age, CEO’s compensation, CEO’s gender, CEO’s ownership, Return on Investment
JEL Classification: Z23
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