Managerial Characteristics and Firm Risk: A Panel Study on the Relation between CEO Characteristics and Stock Volatility in the US

Abstract: This thesis examines the relation between CEO characteristics and stock volatility for a sample of 227 S&P500 firms during the period of 1996 to 2010. After controlling for firm-specific factors, our results give strong evidence that certain CEO characteristics are significantly related to firm volatility. We find that age, time spent with the company and a CEO's base salary are negatively associated with volatility. On the other hand, time in role, CEO experience and education are positively associated with volatility. Our results are robust across different volatility measures and model specifications and carry implications for shareholders, corporate control bodies and investors.