Presenter: Tom Aabo, AU

Title: CEO fitness and corporate performance

Abstract: Physical exercise has been associated with improved cognitive functioning and other psychological benefits. Despite these potential benefits, there is very limited research on the association between the physical fitness level of the CEO and corporate performance. We address this gap in the literature. Specifically, we use artificial intelligence to estimate the physical fitness level of two thousand CEOs in non-financial S&P 1500 firms during the period 2007-2022. We find no support for a general positive or negative association between a continuous measure of the physical fitness level of the CEO and corporate performance. However, we find that extremely fit CEOs (i.e., top 5%) are associated with 7%-10% higher valuation. Furthermore, and somewhat surprisingly, we find that extremely fit CEOs perform worse during crises but better under business-as-usual settings than their less fit peers. Our results suggest that the potential benefits of being extremely fit during crises are, in an empirical sense, more than outweighed by hours spent in the gym (and not the office) and a relatively high focus on the “life” in the work/life balance. Our findings are robust, economically significant, and important for understanding the nuanced relationship between the physical fitness level of the CEO and corporate performance.

Organizers: Stefan Hirth and Mads Markvart Kjær