CEO optimism,CEO selection,compensation, and corporate investment decision: The case of CEOs who were rehired as CEOs by another firms after turnover |
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| Institution: | 1. School of Economics and Management, Dongguan University of Technology, No. 251, Xue Yuan Rd., Dongguan, Guangdong, China;2. Department of Finance, College of Management, National Yunlin University of Science and Technology, No. 123, Sec.3, University Rd., Yunlin County, Taiwan;1. Eastern Mediterranean University, North Cyprus, via Mersin 10, Turkey;2. OSTIM Technical University, Ankara, Turkey;3. Institute of Labor Economics (IZA) Bonn, Germany;4. Economic Research Forum (ERF), Cairo, Egypt;6. Gazi University, Ankara, Turkey;7. University of Nebraska-Omaha, USA;1. School of Economics and Management, Shihezi University, Xinjiang, China;2. School of Economics and Business Administration, Chongqing University, Chongqing, China |
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| Abstract: | What happens to CEOs after they are let go by their firm? This study is designed to investigate CEOs who are rehired as CEOs by another firms after turnover. CEOs defined as “moderately optimistic” and those who left voluntarily from their departing firms, are younger, have better prior performance, and work in larger firms are found to have a greater likelihood of being rehired as a CEO by another employer. Moreover, new-hire firms with higher growth opportunity and higher R&D expenditures are found to be significantly more willing to hire overconfident CEOs. Furthermore, more-optimistic CEOs are found to receive higher total compensation from their new-hire firms than CEOs who are less optimistic. Finally, overconfident CEOs working in firms with high growth opportunity and higher R&D show a significantly greater tendency toward increasing firm investment. |
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| Keywords: | Overconfidence Behavioral finance Chief executive officer Compensation Investment decision |
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