Where are the Shareholders' Mansions? CEOs' Home Purchases, Stock Sales, and Subsequent Company Performance

@article{citeulike:2315201, abstract = {We study real estate purchases by major company CEOs, compiling a database of the principal residences of nearly every top executive in the Standard \& Poor's 500 index. When a CEO buys real estate, future company performance is inversely related to the CEO's liquidation of company shares and options for financing the transaction. We also find that, regardless of the source of finance, future company performance deteriorates when CEOs acquire extremely large or costly mansions and estates. We therefore interpret large home acquisitions as signals of CEO entrenchment. Our research also provides useful insights for calibrating utility based models of executive compensation and for understanding patterns of Veblenian conspicuous consumption.}, author = {Liu, Crocker H. and Yermack, David }, citeulike-article-id = {2315201}, journal = {Social Science Research Network Working Paper Series}, keywords = {ceos, insider, trading}, month = {October}, posted-at = {2008-01-31 15:10:28}, priority = {2}, title = {Where are the Shareholders' Mansions? CEOs' Home Purchases, Stock Sales, and Subsequent Company Performance}, url = {http://ssrn.com/abstract=970413}, year = {2007} }

TY - JOUR ID - citeulike:2315201 L3 - citeulike-article-id:2315201 TI - Where are the Shareholders' Mansions? CEOs' Home Purchases, Stock Sales, and Subsequent Company Performance JF - Social Science Research Network Working Paper Series N2 - We study real estate purchases by major company CEOs, compiling a database of the principal residences of nearly every top executive in the Standard & Poor's 500 index. When a CEO buys real estate, future company performance is inversely related to the CEO's liquidation of company shares and options for financing the transaction. We also find that, regardless of the source of finance, future company performance deteriorates when CEOs acquire extremely large or costly mansions and estates. We therefore interpret large home acquisitions as signals of CEO entrenchment. Our research also provides useful insights for calibrating utility based models of executive compensation and for understanding patterns of Veblenian conspicuous consumption. KW - ceos KW - insider KW - trading AU - Liu, Crocker AU - Yermack, David PY - 2007/October/17/ UR - http://ssrn.com/abstract=970413 ER -