Older CEOs More Likely to Sell Publicly Traded Companies

Stanford's Dirk Jenter and and Dartmouth's Katharina Lewellen have conducted a new study about corporate takeovers.   The two scholars examined more than 9,000 publicly traded American companies over a nearly twenty year period.   They found that companies with older CEOs tended to receive more successful takeover bids.   In fact, CEOs ages 64-66 experienced a 32% increase in successful takeover bids relative to CEOs ages 59-63.  Note that the shareholders did just as well in the deals that occurred for both age groups.  Thus, older CEOs are not accepting lower quality deals.  However, they are doing many more deals.  We should not be surprised, of course.  Younger CEOs still have more years left in their working lives, and they know that selling their companies probably means the loss of their positions.  The key question is:  Are younger CEOs spurning potentially good deals, or are we simply seeing more acquirers focus on companies with older CEOs because they know that those executives are more likely to sell?