A note on assessing the relation between  CEO  characteristics and stock performance:  A lpha  A bove  R eplacement | Zendy

Olsen Brett C. | Zendy; Sisodiya Sanjay R. | Zendy; Swisher Judith | Zendy

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A note on assessing the relation between CEO characteristics and stock performance: A lpha A bove R eplacement

Author(s) -

Olsen Brett C.,

Sisodiya Sanjay R.,

Swisher Judith

Publication year - 2016

Publication title -

accounting and finance

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.645

H-Index - 49

eISSN - 1467-629X

pISSN - 0810-5391

DOI - 10.1111/acfi.12095

Subject(s) - stock (firearms) , equity (law) , econometrics , business , accounting , business administration , mathematics , engineering , political science , mechanical engineering , law

Many studies examine the relation between stock performance and CEO characteristics. We approach the topic in a different way, using the alphas generated by the F ama‐ F rench three‐factor model as the dependent variable in a CEO characteristic model. We find several traits are significantly related to alpha. CEO s who are younger, own a larger fraction of firm equity and hold a graduate degree provide greater alphas. CEO s who are also the founder of the firm deliver larger alphas. Our results provide useful information for boards assessing the performance of CEO s and considering CEO succession.

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