Market reactions to sudden CEO deaths highlight CEOs' importance
Tuesday, March 29, 2016 - 15:31
in Mathematics & Economics
When Tootsie Roll chairman and CEO Melvin Gordon died unexpectedly on Jan. 20, 2015, the firm's value saw an immediate 7 percent increase, which was equivalent to about $140 million. Craig Crossland, an assistant professor of management at the University of Notre Dame's Mendoza College of Business, and his research colleagues examined 240 sudden and unexpected CEO deaths like Gordon's to determine how shareholders' perceptions of CEO significance have changed over time. They found that market reactions to these events in U.S. public firms have increased markedly between 1950 and 2009.