Managerial Trustworthiness and Buybacks

Managerial Trustworthiness and Buybacks

Sterling Huang, Kaisa Snellman, Theo Vermaelen

Series number :

Serial Number: 

Date posted :

October 25 2020

Last revised :

February 06 2022
SSRN Share


  • buybacks • 
  • market timing • 
  • CEO Trustworthiness • 
  • Buyback Motivations

CEO trustworthiness is positively related to long-term excess returns after buyback announcements. When the CEO is trustworthy, statements that the stock is undervalued are more credible. CEO trustworthiness is initially measured by the extent to which people in the county where the company headquarters is located trust each other.

Further, the positive impact of trustworthiness on excess returns is higher when the CEO has been a long-term resident of a high-trust county, and correspondingly, trustworthy CEOs are less likely to be accused of financial misreporting. Our conclusions are confirmed when we use alternative measures of trustworthiness such as employee trust and CEO integrity.

Published in

Published in: 
Publication Title: 
Journal of Financial and Quantitative Analysis, Forthcoming


Real name:
Sterling Huang
Real name:
Kaisa Snellman