TY - JOUR
T1 - Stock price crash risk and CEO power
T2 - Firm-level analysis
AU - Harper, Joel
AU - Johnson, Grace
AU - Sun, Li
N1 - Publisher Copyright:
© 2019 Elsevier B.V.
PY - 2020/1
Y1 - 2020/1
N2 - This study examines the impact of stock price crash risk on future CEO power. Using a large panel sample with 17,816 firm-year observations, we posit and find a significant negative impact of stock price crash risk on CEO power, suggesting that CEO power becomes smaller after stock price crashes. We also find that our results are stronger for firms with female CEOs and are largely driven by firms with shorter-tenure CEOs. In addition, we find that the significant negative impact of stock price crash risk on CEO power is diminished for firms with strong corporate governance. Our study responds to the call in Habib, Hasan, and Jiang (2018) by providing more empirical evidence on the consequences of stock price crash risk.
AB - This study examines the impact of stock price crash risk on future CEO power. Using a large panel sample with 17,816 firm-year observations, we posit and find a significant negative impact of stock price crash risk on CEO power, suggesting that CEO power becomes smaller after stock price crashes. We also find that our results are stronger for firms with female CEOs and are largely driven by firms with shorter-tenure CEOs. In addition, we find that the significant negative impact of stock price crash risk on CEO power is diminished for firms with strong corporate governance. Our study responds to the call in Habib, Hasan, and Jiang (2018) by providing more empirical evidence on the consequences of stock price crash risk.
KW - CEO compensation
KW - CEO power
KW - Stock price crash risk
UR - https://www.scopus.com/pages/publications/85071231576
U2 - 10.1016/j.ribaf.2019.101094
DO - 10.1016/j.ribaf.2019.101094
M3 - Article
AN - SCOPUS:85071231576
SN - 0275-5319
VL - 51
JO - Research in International Business and Finance
JF - Research in International Business and Finance
M1 - 101094
ER -