Abstract
We study the effect of managerial power on CEOs' tendency to imprint their personal leverage preferences upon the firms they manage. Using a unique data source that allows us to measure personal wealth and indebtness in great detail, we find a connection between CEOs' personal leverage and that of their firms. The connection is driven by the CEOs with a longer tenure and the CEOs who serve in a dual role. The connection is significantly weaker for those CEOs who have a proportion of their personal wealth tied to the firm. Presence of block holders also weakens the connection.
Original language | English |
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Pages (from-to) | 19-30 |
Number of pages | 12 |
Journal | Journal of Corporate Finance |
Volume | 45 |
DOIs | |
Publication status | Published - 1 Aug 2017 |
MoE publication type | A1 Journal article-refereed |
Keywords
- CEO behaviour
- Matching preferences
- Personal leverage