Study Links CEO's Private Life to Profits

Company downturns often follow deaths in executives' families
By Sam Gale Rosen,  Newser Staff
Posted Sep 5, 2007 5:16 PM CDT
CEO's are being scrutinized in their personal purchases, family relationships, and public-speaking style, in hopes of gaining investment insights.   (Index Open)
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(Newser) – A new study adds to the growing pool of data showing how intimately a company's success can be linked to the life of its CEO, the Wall Street Journal reports. The latest finding indicates that a firm's profitability drops following the death of a CEO's close family member—though the death of a mother-in-law leads to a slight rise.

Previous studies had shown companies dipped after their CEOs moved into large new homes or received performance awards. Weighing executives' privacy—should a sick child or a new pool be public knowledge?—against investors' need for information is a concern, analysts say. "These are individuals," one says. "It's important to understand they're not automatons."