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It Takes Two: The Incidence and Effectiveness of Co-CEOs


  • We would like to thank an anonymous referee, Robert Van Ness (the editor), Ron Masulis, Sarah Peck, Michaël Dewally, and seminar participants at Marquette University and the 2008 FMA annual meeting for helpful comments and suggestions. We also wish to thank Chris Tamm, Jim Calhoun, Stacy Thorsen, Jiri Tresl, and Dongmei Zhao for their valuable research assistance.

Department of Finance, 312 Straz Hall, Marquette University, Milwaukee, WI 53201-1881; Phone: (414) 288-3369; Fax: (414) 288-5756; E-mail:


This study examines the phenomenon of co-CEOs within publicly traded firms. Although shared executive leadership is not widespread, it occurs within some very prominent firms. We find that co-CEOs generally complement each other in terms of educational background or executive responsibilities. Our results show that firms most likely to appoint co-CEOs have lower leverage, a more limited firm focus, less independent board structure, fewer advising directors, lower institutional ownership, and greater levels of merger activity. The governance structure of co-CEO firms suggests that co-CEOships can serve as an alternative governance mechanism, with co-CEO mutual monitoring substituting for board or external monitoring and co-CEO complementary skills substituting for board advising. An event study indicates that the market reacts positively to appointments of co-CEOs while a propensity score analysis shows that the presence of co-CEOs increases firm valuation.