CEO Celebrity is BAD for Shareholders!


	CEO Celebrity is BAD for Shareholders!

CulturalEngineer

11-14-2009 9:39 AM

4473 views

tags:

economics, business, politics, celebrity

CulturalEngineer says:

not to mention the rest of us...

The confusion about just what a celebrity really IS has consequences for a civilization... FAME vs. WISDOM? Where do YOU stand?

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/1974543a-068f-40b5-9fd3-d898465a20d6/7BDD6A41-30EA-4C8F-88CC-A689CACF2404/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://paul.kedrosky.com/archives/2009/11/superstar_ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29" href="http://paul.kedrosky.com/archives/2009/11/superstar_ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29" style="font-size: 11px;">paul.kedrosky.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://paul.kedrosky.com/archives/2009/11/superstar_ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29"><H1 id="post-37918">Superstar CEOs Suck</H1></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://paul.kedrosky.com/archives/2009/11/superstar_ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29"><I>By <A href="http://paul.kedrosky.com">Paul Kedrosky</A></I></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://paul.kedrosky.com/archives/2009/11/superstar_ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29">Compensation, status, and press coverage of managers in the United States follow a highly skewed distribution: a small number of “superstars” enjoy the bulk of the rewards. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://paul.kedrosky.com/archives/2009/11/superstar_ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29">We find that <STRONG>award-winning CEOs subsequently underperform</STRONG>, both relative to their prior performance and relative to a matched sample of non-winning CEOs. At the same time, they extract more compensation following the awards, both in absolute amounts and relative to other top executives in their firms. They also <STRONG>spend more time on public and private activities outside their companies</STRONG>, such as assuming board seats or writing books. The incidence of <STRONG>earnings management increases after winning awards</STRONG>. The effects are strongest in firms with weak corporate governance. Our results suggest that the <I>ex post</I> consequences of media-induced superstar status for shareholders are negative.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/7BDD6A41-30EA-4C8F-88CC-A689CACF2404/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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