Abstract
We study the market for CEOs of large publicly traded US firms, analyze new CEOs’ prior connections to the hiring firm, and explore how hiring choices are determined. Firms hire CEOs they are already familiar with – their current or former executives, current or former board members, or managers its directors have worked with – more than 90% of the time. There are few reallocations of CEOs across firms. Firms raid CEOs of other firms for only 3.5% of hires, and the CEO raids that occur are typically from much smaller firms. These patterns are difficult to reconcile with perfectly competitive and frictionless assignment. They instead suggest that the CEO labor market is imperfectly competitive, and that firm-specific human capital, asymmetric information, or other frictions have first-order effects on the assignment of CEOs to firms.
© Peter Cziraki, Dirk Jenter, 2022
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