CEO optimism and forced turnover

• 成果类型: Article
• 署名作者: Campbell, T. Colin; Gallmeyer, Michael; Johnson, Shane A.; Rutherford, Jessica; Stanley, Brooke W.
• 署名单位: Texas A&M University System; Texas A&M University College Station; Mays Business School; University System of Ohio; Miami University; University of Virginia; Winthrop University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.03.004
• 发表日期: 2011
• 页码: 695-712
• 关键词: CEO TURNOVER; optimism; overconfidence; Managerial biases

摘要

We show theoretically that optimism can lead a risk-averse Chief Executive Officer (CEO) to choose the first-best investment level that maximizes shareholder value. Optimism below (above) the interior optimum leads the CEO to underinvest (over-invest). Hence, if boards of directors act in the interests of shareholders, CEOs with relatively low or high optimism face a higher probability of forced turnover than moderately optimistic CEOs face. Using a large sample of turnovers, we find strong empirical support for this prediction. The results are consistent with the view that there is an interior optimum level of managerial optimism that maximizes firm value. (C) 2011 Elsevier B.V. All rights reserved.