ScholarWorks@성균관대학교

초록

Close to one in three external CEO successors is connected to the hiring firm's outside directors—a much higher frequency than expected. Connected hirings are particularly pronounced among informationally opaque firms and less established CEOs. Consistent with rent sharing, connected CEOs enhance firm value relative to unconnected CEOs, and they receive lower initial compensation, although the pay differential subsequently dissipates. Finally, the firm-CEO matching quality of connected CEOs is at least comparable to that of unconnected CEOs as both display similar separation rates. Overall, our findings suggest that connected hirings alleviate bilateral information asymmetry in the CEO labor market.

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