DP14933 CEO Stress, Aging, and Death

Author(s): Mark Borgschulte, Marius Guenzel, Canyao Liu, Ulrike M. Malmendier
Publication Date: June 2020
Keyword(s):
JEL(s):
Programme Areas: Financial Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14933

We show that increased job demands due to takeover threats and industry crises have significant adverse consequences for managers' long-term health. Using hand-collected data on the dates of birth and death for more than 1,600 CEOs of large, publicly listed U.S. firms, we estimate that CEOs' lifespan increases by around two years when insulated from market discipline via anti-takeover laws. CEOs also stay on the job longer, with no evidence of a compensating differential in the form of lower pay. In a second analysis, we find diminished longevity arising from increases in job demands caused by industry-wide downturns during a CEO's tenure. Finally, we utilize machine-learning age-estimation methods to detect visible signs of aging in pictures of CEOs. We estimate that exposure to a distress shock during the Great Recession increases CEOs' apparent age by roughly one year over the next decade.