Article (Scientific journals)
CEO Ownership, Stock Market Performance, and Managerial Discretion
Von Lilienfeld-Toal, Ulf; Ruenzi, Stefan
2014In Journal of Finance
Peer reviewed
 

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Abstract :
[en] We examine the relationship between CEO ownership and stock market performance. A strategy based on public information about managerial ownership delivers annual abnormal returns of 4% to 10%. The effect is strongest among firms with weak exter- nal governance, weak product market competition, and large managerial discretion, suggesting that CEO ownership can reverse the negative impact of weak governance. Furthermore, owner-CEOs are value increasing: they reduce empire building and run their firms more efficiently. Overall, our findings indicate that the market does not correctly price the incentive effects of managerial ownership, suggesting interesting feedback effects between corporate finance and asset pricing.
Disciplines :
Finance
Author, co-author :
Von Lilienfeld-Toal, Ulf ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Luxembourg School of Finance (LSF)
Ruenzi, Stefan
Language :
English
Title :
CEO Ownership, Stock Market Performance, and Managerial Discretion
Publication date :
June 2014
Journal title :
Journal of Finance
ISSN :
0022-1082
Publisher :
Blackwell Publishing
Peer reviewed :
Peer reviewed
Available on ORBilu :
since 24 October 2014

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