Farzad Saidi, University of Bonn

"Aging at the Very Top"

Abstract

We document that since 2000 U.S. CEOs are on average 7 to 8 years older upon appointment. Using employment history data from BoardEx and LinkedIn, we show that this development is driven by later appointments and a greater variety of prior work experiences. We hypothesize that these trends reflect a shift toward generalist skills. Using exogenous variation in the proximity to strategy consulting firms and their employees, we show that firms increase their demand for generalist skills in response to greater industry-level uncertainty and complexity, and subsequently appoint older CEOs when generalist consultants are not readily available. Our results also indicate that prospective CEOs strategically respond to these evolving skill requirements. Exploiting the network structure resulting from employment histories, we demonstrate that job mobility increases in response to positive information shocks about the value of job transitions. In particular, workers are more likely to accept positions at lower seniority levels at other firms, reflecting that they are willing to sacrifice short-run wage growth for the longer-run purpose of acquiring generalist skills.

Co-authors: Valentin Kecht and Alessandro Lizzeri

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Contact person: Daniel le Maire