CEO - the explicit value

Sammanfattning: The purpose of this essay is to examine the value connected to a company's CEO. CEO remuneration is a topic that is often addressed in the media and a central topic in research. The value added by a CEO is often questioned and hard to test for. We approach this by looking at the impact of CEO death on OROA. Using an extensive Swedish data set, we find a significant negative effect on operating return on assets from a CEO death event. The event is not followed by any over performance, meaning that losses are permanent. Smaller firms based on number of employees are hit harder by the event. CEO characteristics do not show significant differences aside from CEO tenure, which shows some impact only for the event year. Overall, the results exhibit CEO importance to Swedish firms.