Single CEOs, Bigger Risk Takers than Married CEOs
Bangalore: If a question of whether or not unmarried CEOs take bigger risks is brought up, definitely the answer would be a ‘YES’. It is found that single CEOs are associated with firms which have higher stock returns and go for investment policies which have greater risk.
Single CEOs would more likely go for capital investments and acquisitions. The basic idea behind this is that, since highly attractive marriage partners are hard to find and scarce, high income earners like CEOs must compete for their attention. Single high income earners value their income more than do married high income earners and these single income earners value each additional dollar they earn more than do married high-income earners. These additional dollars gives them the want and desire to consume more and also develops their chances of finding themselves a better marriage partner
Therefore Single high income earners are encouraged to assume investment policies that are more aggressive and expose shareholders to greater risk in pursuit of more income.
It is also found that single CEOs would be associated firms which exhibit higher stock return and go for investment policies which have greater risk. But it’s seen that this effect is weaker for older CEOs. The impact of marital status is high for risk taking.
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