FORE! An Analysis of CEO Shirking

50 Pages Posted: 13 Sep 2014 Last revised: 5 Nov 2014

See all articles by Lee Biggerstaff

Lee Biggerstaff

Miami University of Ohio - Department of Finance

David C. Cicero

Harbert College of Business, Auburn University

Andy Puckett

University of Tennessee, Knoxville

Date Written: August 1, 2014

Abstract

Using golf play as a measure of leisure, we document that there is significant variation in the amount of leisure that CEOs consume. We find that they consume more leisure when they have lower equity-based incentives. CEOs that golf frequently (i.e., those in the top quartile of golf play, who play at least 22 rounds per year) 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. We find that boards are more likely to replace CEOs who shirk, but CEOs with longer tenures or weaker governance environments appear to avoid disciplinary consequences.

Keywords: CEO, Chief Executive Officer, Shirking, Leisure, Incentives Compensation

JEL Classification: G30, G32, G34

Suggested Citation

Biggerstaff, Lee and Cicero, David C. and Puckett, Andy, FORE! An Analysis of CEO Shirking (August 1, 2014). Available at SSRN: https://ssrn.com/abstract=2495105 or http://dx.doi.org/10.2139/ssrn.2495105

Lee Biggerstaff

Miami University of Ohio - Department of Finance ( email )

Oxford, OH 45056
United States

David C. Cicero (Contact Author)

Harbert College of Business, Auburn University ( email )

415 Magnolia Ave.
Auburn, AL 36849
United States

Andy Puckett

University of Tennessee, Knoxville ( email )

437 Stokely Managment Center
Knoxville, TN 37996
United States

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