What happens to CEOs after they retire? New evidence on career concerns, horizon problems, and CEO incentives

This paper provides evidence on a previously unidentified source of manager ial incentives: concerns about post-retirement board service. Both the like lihood that a retired CEO serves on his own board two years after departure , as well as the likelihood of serving as an outside director on other boar ds, are positively and strongly related to his performance while CEO. Reten tion on the CEO's own board depends primarily on stock returns, while servi ce on outside boards is better explained by accounting returns. The evidenc e also suggests that firms consider ability in choosing board members. (C) 1999 Elsevier Science S.A. All rights reserved.