Abstract
Certain characteristics of managerial employment arrangements and of the managerial labor market make shareholder wealth dependent on an executive's continued employment. These wealth effects are investigated by examining the common stock price reaction to unexpected deaths of senior corporate executives. Abnormal stock price changes are documented for a sample of fifty-three events. These abnormal stock price changes are associated with the executive's status as a corporate founder and with measures of the executive's 'talents' and decision-making responsibility, and of the transaction costs associated with renegotiating or terminating the employment agreement.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 151-174 |
| Number of pages | 24 |
| Journal | Journal of Accounting and Economics |
| Volume | 7 |
| Issue number | 1-3 |
| DOIs | |
| State | Published - Apr 1985 |
Funding
*We are indebted to Robert Holthausen, Katherine Schipper, to our colleagues at Northwestern University, and to participants at workshops at the University of Chicago and Oklahoma State University for their comments and criticisms. We would also like to acknowledge the research assistance provided by R. Krishnan. Financial support for this project was provided by the Ernst and Whinney Foundation and the Accounting Research Center, J.L. Kellogg Graduate School of Management, Northwestern University.
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
