BUSINESS

Study Finds Link Between CEO-Family Deaths And Company Profits

03/28/2008 02:45 am ET | Updated May 25, 2011

Should shareholders in a company care if the chief executive's child dies? What if the mother-in-law passes away?

Such things don't normally figure in investment decisions. But maybe they should, according to a recent study by three finance professors. Mining a trove of Danish government data on thousands of businesses, they were able to track links between CEO-family deaths and the companies' profitability over a decade.

It slid by about one-fifth, on average, in the two years after the death of a CEO's child, and by about 15% after the death of a spouse. As for an executive's mother-in-law, the old jokes seem to hold: The researchers found that profitability, on average, rose slightly after her demise.

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