Barron's Survey: The World's Best CEOs

Abstract

We examine the abnormal returns around the publication dates of the Barron World’s Best CEOs issues along with longer-term, risk-adjusted performance. One specific focus of the paper is whether the inclusion in the Barron’s survey leads to an increase in positive “affect” of the firms as suggested by Statman, Fisher, and Anginer (2008) in the case of Fortune’s most admired firms. In addition, we explore the effect of the listing on the compensation of CEOs included in the ranking. We find a negative share price response to the release of Barron’s list. The Best CEOs portfolio return is indistinguishable from the S & P 500 on a longer-term basis, and it underperformed against constructed matched samples, with no differences in risk adjusted returns. Profitability did not increase for selected firms in the post-announcement period and no patterns exist in terms of changes in CEO compensation are associated with the CEO’s inclusion in Barron’s list.