Why do ol­der CEOs in­vest less?

Among U.S. public firms, the share of CEOs aged 60 or older has nearly doubled over the past decade to around 40%. A new Journal of Corporate Finance study by Steffen Brenner and Torben Juul Andersen (EGB), together with Jeppe Christoffersen and Thomas Plenborg (ACC), sheds new light on how CEO age shapes corporate investment decisions.

Drawing on a large-scale experiment with more than 3,700 Danish CEOs, the study finds that lower investment among older CEOs cannot readily be explained by greater risk aversion or shorter investment horizons. Instead, older CEOs consistently view otherwise identical investment opportunities as less attractive, suggesting that projects need to be more compelling before they are pursued.

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