Abstract Are typical long-tenured CEOs rent-seekers? Do compensation committees consider undiversified risk for veteran executives and design their cash pay to limit their risk exposure? Because an exit decision requires board approval, discontinued operations provide a unique setting to analyze intervention by compensation committees. Seasoned managers should require less oversight because their ability has been revealed over time. However, as CEOs advance in their careers, they are more likely to acquire power to influence board decisions. They are also more risk averse and potentially more myopic than younger CEOs because they hold a large undiversified portfolio. Lucrative labor markets for talented retired executives can incentivize long-tenured CEOs to maintain a solid reputation. I reexamine the previously reported differential sensitivity of CEO cash compensation to positive or negative-valued disposal decisions, which can be viewed as rent-seeking. I show that cash pay for veteran CEOs are shielded from the effect of both negative and positive-valued discontinued operations, suggesting that compensation committees alter their cash pay. This evidence does not support rent-seeking. I also find strong evidence that long-tenured CEOs make better exit decisions to improve future firm performance than less experienced executives.

中文翻译：

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长期任职的CEO是寻租者吗？现金补偿和处置后绩效分析

摘要典型的长期任职CEO是寻租者吗？薪酬委员会是否考虑对高级管理人员进行不分散的风险，并设计其现金报酬以限制他们的风险敞口？由于退出决策需要获得董事会的批准，因此停业经营提供了一种独特的环境来分析薪酬委员会的干预。经验丰富的经理应该减少监督，因为他们的能力已经随着时间的流逝而逐渐显现出来。但是，随着首席执行官的职业发展，他们更有可能获得影响董事会决策的权力。与年轻的CEO相比，他们还具有更高的规避风险和近视能力，因为他们拥有大量未分散的投资组合。有才华的退休高管的利润丰厚的劳动力市场可以激励长期任职的CEO保持良好声誉。我重新检查了先前报道的首席执行官现金补偿对正值或负值处置决策的敏感性差异，这可以看作是寻租。我证明，退伍军人CEO的现金报酬不受负值和正值终止经营的影响，这表明薪酬委员会会改变其现金报酬。该证据不支持寻租。我还发现，有力的证据表明，与经验不足的高管相比，长期任职的CEO可以做出更好的退出决策以改善未来的公司绩效。该证据不支持寻租。我还发现，有力的证据表明，与经验不足的高管相比，长期任职的CEO可以做出更好的退出决策，以改善未来的公司绩效。该证据不支持寻租。我还发现，有力的证据表明，与经验不足的高管相比，长期任职的CEO可以做出更好的退出决策以改善未来的公司绩效。