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Title: CEO age and stock price crash risk
Authors: Andreou, Panayiotis 
Louca, Christodoulos 
Petrou, Andreas 
Major Field of Science: Social Sciences
Field Category: Economics and Business
Keywords: CEO age;Crash risk;Hoarding of bad news;Agency theory;Managerial discretion
Issue Date: 1-May-2017
Source: Review of Finance, 2017, vol. 21, no. 3, pp. 1287-1325
Volume: 21
Issue: 3
Start page: 1287
End page: 1325
Journal: Review of Finance 
Abstract: We show that firms with younger CEOs are more likely to experience stock price crashes, including crashes caused by revelation of negative news in the form of breaks in strings of consecutive earnings increases. Such strings are accompanied by large increases in CEO compensation that do not dissipate with crashes. These findings suggest that CEOs have financial incentives to hoard bad news earlier in their career, which increases future crashes. This negative impact of CEO age effect is strongest in the presence of managerial discretion. Overall, the findings highlight the importance of CEO age for firm policies and outcomes.
ISSN: 1573-692X
DOI: 10.1093/rof/rfw056
Rights: © The Authors . Published by Oxford University Press on behalf of the European Finance Association. All rights reserved
Type: Article
Affiliation : Cyprus University of Technology 
Durham University 
Appears in Collections:Άρθρα/Articles

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