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FORE! An Analysis of CEO Shirking

Author

Listed:
  • Lee Biggerstaff

    (Department of Finance, Farmer School of Business, Miami University, Oxford, Ohio 45056)

  • David C. Cicero

    (Department of Economics, Finance and Legal Studies, University of Alabama, Tuscaloosa, Alabama 35487; and Department of Finance, Raymond J. Harbert College of Business, Auburn University, Auburn, Alabama 36849)

  • Andy Puckett

    (Department of Finance, Haslam College of Business, University of Tennessee, Knoxville, Tennessee 37996)

Abstract

Using golf play as a measure of leisure, we provide direct evidence that some CEOs shirk their responsibilities to the detriment of firm shareholders. CEOs with lower equity-based incentives play more golf and those that golf the most are associated with firms that have lower operating performance and firm values. Numerous tests accounting for the possible endogenous nature of these relations support a conclusion that CEO shirking causes lower firm performance. New CEOs and those at firms with more independent boards are more likely to be replaced when they shirk, but those with long tenures or less independent boards appear to avoid discipline.

Suggested Citation

  • Lee Biggerstaff & David C. Cicero & Andy Puckett, 2017. "FORE! An Analysis of CEO Shirking," Management Science, INFORMS, vol. 63(7), pages 2302-2322, July.
    • Handle: RePEc:inm:ormnsc:v:63:y:2017:i:7:p:2302-2322
    DOI: 10.1287/mnsc.2016.2452
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