Family First? How CEOs’ Private Lives Can Shape Corporate Geography

Why does a company move its headquarters?

The conventional answers are familiar. Firms move to reduce taxes, attract skilled workers, access airports and professional services, or place themselves closer to customers, suppliers, and industry peers. These are all corporate considerations. But there is another possibility that is harder to observe: sometimes the geography that is attractive to the company’s CEO may not be the geography that is best for the company.

In our paper, “Family First: CEOs’ Private Incentives in Corporate Relocations,” we study whether CEOs’ family considerations influence one of the largest geographic decisions a firm can make: where to locate its headquarters. The setting is useful because headquarters relocations are consequential but give senior executives considerable discretion. Unlike many major corporate transactions, relocating headquarters generally does not require a shareholder vote. And headquarters moves are far from trivial. In our sample, nearly 1,000 public firms relocate over the past three decades. Most moves cross state lines, and the median relocation is more than 800 miles. 

The first clue that CEOs matter is timing. The probability of relocating increases sharply after a new CEO arrives and peaks early in the CEO’s tenure. Nearly half of realized relocations occur around a recent CEO transition. Importantly, the pattern is even stronger following leadership changes associated with death, illness, age-based retirement, or other reasons that are less likely to reflect deteriorating firm performance. There is little evidence of elevated relocation activity before these transitions; the increase occurs after the new CEO takes over. 

That suggests a change in leadership can reopen a decision that had previously been settled: Where should this company be headquartered? We then ask a more personal question: where does the new CEO want to be? To answer it, we construct a new dataset tracing the residential geography of CEOs’ immediate families, including their adult children. This allows us to compare the location of a firm’s new headquarters not only with its old headquarters, but also with economically plausible alternative destinations based on where other firms in the same industry are concentrated.

The pattern is striking. More than 40% of new headquarters are located within 100 miles of a CEO’s adult child, and 35% are within 50 miles. The median new headquarters is 247 miles from the CEO’s nearest child, compared with 848 miles from alternative industry hubs. In a destination-choice model, even after comparing locations within the same relocation decision, proximity to the CEO’s family strongly predicts which location is selected. 

Leadership changes provide an especially revealing comparison. When the CEO changes, the relevant family geography changes too. Firms move away from the outgoing CEO’s family and toward the incoming CEO’s family. Following more plausibly exogenous CEO turnovers, the same pattern remains.

Of course, CEOs’ children do not live randomly across the country. A CEO and their children may share longstanding ties to Boston, Dallas, or San Francisco, and those locations may also happen to make economic sense for the company. We therefore use an additional source of variation: the geographic origin of the CEO child’s spouse. Whom an adult child marries can influence where that couple eventually lives, while the spouse’s family origins are considerably further removed from the CEO’s corporate location decisions. Using this variation as an instrument for the child’s location produces similar results: firms are more likely to select headquarters locations closer to the CEO’s family. 

The next question is whether this has negative economic consequences. One possibility is that it does not. A happier CEO could be a more productive CEO. Family considerations and shareholder interests could simply point toward the same destination. Our evidence, however, suggests a tradeoff. When a headquarters relocation brings the company within 100 miles of the CEO’s child, the stock market reaction is about one percentage point lower than for other headquarters moves. These destinations are also less closely connected to the company’s existing operations: before the move, a smaller share of the firm’s workforce is located near the eventual headquarters. 

Employees appear to bear part of the adjustment cost as well. One to two years after family-proximate moves, employee separation rates in the origin state are roughly 1.1 to 1.4 percentage points higher, a sizable increase relative to the sample’s 2.8% average separation rate. Employees who leave are also disproportionately likely to remain near the old headquarters rather than follow the company. 

And employees notice something has changed. Around family-proximate relocations, Glassdoor ratings fall particularly sharply for senior leadership and culture and values. These results do not prove that employees know why management selected a particular city. But combined with the market reaction, workforce departures, and weaker operational fit, they paint a consistent picture. 

The broader lesson is not that CEOs should ignore their families. Nor does every move toward a CEO’s family represent managerial self-dealing. The lesson is more fundamental: managerial incentives extend beyond compensation, ownership, and career concerns. Executives are people with families, geographic attachments, and private sources of utility. When executives have discretion over major corporate decisions, those preferences can enter the firm’s choices, and sometimes impose costs on shareholders and employees.

Corporate governance therefore needs to think about more than how much a CEO owns or earns. Understanding what managers value outside the firm may also be essential for understanding what firms ultimately do.

Denis Sosyura is the James and Elizabeth Robertson Professor of Finance at Arizona State University and an ECGI Research Member. 

This blog is based on a paper presented at the Corporate Governance Academic Forum at the University of Toronto with ECGI, held on 2 October 2026. Visit the event page to explore more conference-related blogs.

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