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Trump this
I found this clever paper, amusing.
Flights of Fancy: Corporate Jets, CEO Perquisites, and Inferior Shareholder Returns (SSRN)
Abstract: This paper studies perquisites of major company CEOs, focusing on personal use of company planes. For firms that have disclosed this managerial benefit, average shareholder returns under-perform market benchmarks by more than 4 percent annually, a severe gap far exceeding the costs of resources consumed. Around the date of the initial disclosure, firms' stock prices drop by an average of 2 percent. Regression analysis finds negative associations between CEOs' personal aircraft use and their compensation and percentage ownership, in accord with Jensen-Meckling (1976) and Fama (1980), but both relations have small magnitude.
Posted by Alex Tabarrok on April 15, 2004 at 05:36 PM in Economics | Permalink
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» Corporate jets and shareholder returns from Houston's Clear Thinkers
The following is the compelling synopsis of NYU finance professor David Yermack's paper, "Flights of Fancy: Corporate Jets, CEO Perquisites, and Inferior Shareholder Returns", which will not go over well in certain boardrooms: This paper studies perqui... [Read More]
Tracked on Apr 15, 2004 9:27:52 PM
» And what is that supposed to prove? from Waddling Thunder, mach 2.0
Alex Tabarok of Marginal Revolution points to this article on CEO private airplane use and corporate performance. [Read More]
Tracked on Apr 20, 2004 4:31:02 PM
» And what is that supposed to prove? from Waddling Thunder, mach 2.0
Alex Tabarok of Marginal Revolution points to this article on CEO private airplane use and corporate performance. [Read More]
Tracked on Apr 20, 2004 4:31:14 PM
