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It's good to talk! CEOs rewarded for early strategy presentations

New CEOs, especially those appointed from outside the industry, can see company stock prices soar if they present their strategy to investors in their first hundred days, our research has discovered. However, the effects are lessened if the CEO was an internal appointment or if the presentation is delayed too long.

Research Summary

We studied the effects on stock prices of more than 900 public presentations on strategy by CEOs of leading U.S. companies. Our results revealed that new CEOs who present their strategy within the first 100 days of their appointment can see stock prices rise by an average of 5.3% on presentation day (around $2.8 billion in market value). The average stock price gains for presentations by new CEOs appointed from outside the organisation were 9.3% (just under $5 bn), and for new CEOs from outside the company’s home industry they were 12.4% (around $6.6 bn).

We analysed stock price responses to strategy presentations given by companies on the NYSE or NASDAQ exchange in the period from 1 January 2000 to 30 December 2010. These were presentations that involved long-term plans regarding the overall organizational strategy, not specific announcements of Merger and Acquisition deals, product innovations, and so on. We also excluded presentations given the same day as earnings announcements or forecasts.

Research forthcoming

Whittington, R., Yakis-Douglas, B., and Ahn, K., Cheap Talk? Strategy presentations as a form of chief executive officer impression management. Strategic Management Journal. 


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Oxford Saïd authors

Richard Whittington, Professor of Strategic Management

Basak Yakis-Douglas, Research Fellow, Oxford University Centre for Corporate Reputation

Other authors

Kwangwon Ahn, HSBC Business School, Peking University