TY  - JOUR
AU  - Malmendier,Ulrike
AU  - Tate,Geoffrey
TI  - Superstar CEOs
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14140
PY  - 2008
Y2  - June 2008
UR  - http://www.nber.org/papers/w14140
L1  - http://www.nber.org/papers/w14140.pdf
N1  - Author contact info:
Ulrike Malmendier
Department of Economics
549 Evans Hall # 3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510-642-5038
E-Mail: ulrike@econ.berkeley.edu

Geoffrey Tate
Finance Department - Rm C420
UCLA Anderson School of Management
110 Westwood Plaza
Los Angeles, CA  90095
Tel: 310-825-3544
E-Mail: geoff.tate@anderson.ucla.edu
AB  - Compensation, status, and press coverage of managers in the U.S. follow a highly skewed distribution: a small number of 'superstars' enjoy the bulk of the rewards. We evaluate the impact of CEOs achieving superstar status on the performance of their firms, using prestigious business awards to measure shocks to CEO status. We find that award-winning CEOs subsequently underperform, both relative to their prior performance and relative to a matched sample of non-winning CEOs. At the same time, they extract more compensation following the award, both in absolute amounts and relative to other top executives in their firms. They also spend more time on public and private activities outside their companies, such as assuming board seats or writing books. The incidence of earnings management increases after winning awards. The effects are strongest in firms with weak governance, even though the frequency of obtaining superstar status is independent of corporate governance. Our results suggest that the ex-post consequences of media-induced superstar status for shareholders are negative.
ER  -