CEO Characteristics and Level of Cash of Holdings in Company

This paper discovers the influence of CEO characteristics on the level of cash in public companies. The research is conducted basing on the panel data on European companies participating in S&P 350 Index during the period from 2015 to 2019. This research provides statistical evidence on the impact of such characteristics as CEO’s age, tenure, gender, ownership participation, being company’s founder and combination of roles of CEO and SOB (duality). Methodology of the study includes calculation of excess cash levels for industry and determines companies with this feature. The research also employs method of building and analysis of random-effect panel regressions of overall cash level and excess cash level from CEO characteristics. The results are consistent with the previous investigations’ outcomes and indicate that such characteristics as CEO’s age, tenure and duality tend to have a lowering effect on the level of cash in company, while female gender and increase in ownership participation lead to the growth of cash. Moreover, CEO’s tenure and being company’s founder are positively correlated with excess cash level, and CEO’s age correlates negatively with this indicator.