Mansions of the CEOs
I certainly have to wonder about a recent survey by two finance professors about how the size of a CEO’s house correlates with financial performance. David Yermack of NYU and Crocker Liu of Arizona State actually examined 432 CEOs of large-sized companies in 2004 and found that 12% lived in homes having at least 10,000 square feet or 10 acres. They also found in 2005 that CEOs with the biggest homes lagged behind those with the smallest homes by approximately 7%. The authors are quoted as saying that “Sprawling homes might be a sign that CEOs are taking advantage of profits…”
To be honest, I can hardly believe that two finance professors spent time researching this idea. What on earth can anyone do with this information. Should I investigate the size of my CEO’s house to foretell how profits are being used? Is this a good use of valuable university research time?
The fascination with CEOs continues to astound me. The next thing I know we will be researching the size of CEOs’ feet and how that relates to oversized ambition. I can only shake my head.
CEO mansions, size of mansions, reputation, financial performance, David Yermack, NYU, Crocker Liu, Arizona State