--- title: "Meaning & Key Takeaway of: We find that firms with award-winning…" description: "\"“We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance. At the same time, CEO compe..." image: "https://sms4smile.com/quotes/i/815/daniel-kahneman-431_ceos_we-find-that-firms-with-award-winning-ce_245525.jpg" --- # We find that firms with award-winning CEOs subsequently… ![“We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance. At the same time, CEO compensation increases, CEOs spend more time on activities outside the company such as writing books and sitting on outside boards, and they are more…” quote by Daniel Kahneman](https://sms4smile.com/quotes/i/815/daniel-kahneman-431_ceos_we-find-that-firms-with-award-winning-ce_245525.jpg) [Download](https://sms4smile.com/quotes/i/815/daniel-kahneman-431_ceos_we-find-that-firms-with-award-winning-ce_245525.jpg) [Open image](https://sms4smile.com/quotes/i/815/daniel-kahneman-431_ceos_we-find-that-firms-with-award-winning-ce_245525.jpg) > ““We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance. At the same time, CEO compensation increases, CEOs spend more time on activities outside the company such as writing books and sitting on outside boards, and they are more likely to engage in earnings management.”” [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Award‑winning CEOs often see later declines in stock and operational results, while their pay rises and they focus more on external pursuits, sometimes leading to earnings manipulation. **In simple terms:** Successful CEOs can underperform later, earn more, and shift focus outward. Key Takeaway Beware of over‑celebrating CEOs; monitor performance and incentives. Themes leadership performance incentives governance Mood cautious analytical Type analytical critical When to use this quote - board oversight - executive compensation design - performance monitoring - earnings quality assessment Key Concepts agency theory behavioral finance principal‑agent problem Questions to Reflect On - How do external engagements affect a CEO’s core responsibilities? - What controls can prevent earnings management? A Different Perspective High accolades may mask underlying issues and create complacency. ★ ★ ★ ★ ★ No ratings yet [Ceos](https://sms4smile.com/quotes/about/ceos/) ## Related quotes > [Compensation needs to be predominately performance-driven. If CEO compensation was performance-driven, which I believe it was in IBM's case, nobody would ever argue. If…](https://sms4smile.com/quotes/louis-v-gerstner-jr/compensation-needs-to-be-predominately-performance-driven-if-ceo/) [Louis V. Gerstner, Jr](https://sms4smile.com/quotes/author/louis-v-gerstner-jr/) > [“In 1980, the compensation of the average chief executive officer was forty-two times that of the average worker; by the year 2004, the ratio…](https://sms4smile.com/quotes/john-bogle/in-1980-the-compensation-of-the-average-chief-executive-officer-was/) John Bogle > [The inequality between CEO compensation and the compensation received by workers and stockholders has grown to such an extent that it endangers our economy…](https://sms4smile.com/quotes/danny-k-davis/the-inequality-between-ceo-compensation-and-the-compensation-received/) [Danny K. Davis](https://sms4smile.com/quotes/author/danny-k-davis/) > [If CEO compensation was performance-driven, which I believe it was in IBM's case, nobody would ever argue. If the shareholders didn't make billions and…](https://sms4smile.com/quotes/anonymous/if-ceo-compensation-was-performance-driven-which-i-believe-it-was-in/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [CEOs need to produce continuous growth in sales and profits. Yet they must also invest in sustainability and social responsibility, which then leave them…](https://sms4smile.com/quotes/philip-kotler/ceos-need-to-produce-continuous-growth-in-sales-and-profits-yet-they/) [Philip Kotler](https://sms4smile.com/quotes/author/philip-kotler/) > [My job is to find great ideas, exaggerate them, and spread them like hell around the business with the speed of light...And to put…](https://sms4smile.com/quotes/jack-welch/my-job-is-to-find-great-ideas-exaggerate-them-and-spread-them-like/) [Jack Welch](https://sms4smile.com/quotes/author/jack-welch/) > [If your cash is about to run out, you have to cut your cash flow. CEOs have to make those decisions and live with…](https://sms4smile.com/quotes/larry-ellison/if-your-cash-is-about-to-run-out-you-have-to-cut-your-cash-flow-ceos/) [Larry Ellison](https://sms4smile.com/quotes/author/larry-ellison/) > [The best board members aren't elected by default. CEOs that set themselves up with their choice of board member - which means getting more…](https://sms4smile.com/quotes/scott-weiss/the-best-board-members-aren-t-elected-by-default-ceos-that-set/) [Scott Weiss](https://sms4smile.com/quotes/author/scott-weiss/) > [The shining star in the world is Shanghai. 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If the system wasn't so messed up, guys like me wouldn't make this kind of money.](https://sms4smile.com/quotes/carl-icahn/ceos-are-paid-for-doing-a-terrible-job-if-the-system-wasn-t-so-messed/) [Carl Icahn](https://sms4smile.com/quotes/author/carl-icahn/) > [There's something to be said for CEOs' entering politics: In theory, they have management expertise and financial savvy. Then again, it didn't work so…](https://sms4smile.com/quotes/nicholas-kristof/there-s-something-to-be-said-for-ceos-entering-politics-in-theory/) [Nicholas Kristof](https://sms4smile.com/quotes/author/nicholas-kristof/) > [The deck is still stacked in favor of those already at the top. And there's something wrong with that. There's something wrong when CEOs…](https://sms4smile.com/quotes/hillary-clinton/the-deck-is-still-stacked-in-favor-of-those-already-at-the-top-and/) [Hillary Clinton](https://sms4smile.com/quotes/author/hillary-clinton/) > [“It seems some CEOs who pay extremely large acquisition premiums … come to believe their own press.”](https://sms4smile.com/quotes/chip-heath/it-seems-some-ceos-who-pay-extremely-large-acquisition-premiums-come/) [Chip Heath](https://sms4smile.com/quotes/author/chip-heath/) ## More by Daniel Kahneman > [Economists think about what people ought to do. Psychologists watch what they actually do.](https://sms4smile.com/quotes/daniel-kahneman/economists-think-about-what-people-ought-to-do-psychologists-watch/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“Belief in the Law of Small Numbers.”](https://sms4smile.com/quotes/daniel-kahneman/belief-in-the-law-of-small-numbers/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“People who are poor think like traders, but the dynamics are quite different. Unlike traders, the poor are not indifferent to the differences between…](https://sms4smile.com/quotes/daniel-kahneman/people-who-are-poor-think-like-traders-but-the-dynamics-are-quite/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“Mood evidently affects the operation of System 1: when we are uncomfortable and unhappy, we lose touch with our intuition.”](https://sms4smile.com/quotes/daniel-kahneman/mood-evidently-affects-the-operation-of-system-1-when-we-are/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even…](https://sms4smile.com/quotes/daniel-kahneman/the-confidence-that-individuals-have-in-their-beliefs-depends-mostly/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“So this is my aim for watercooler conversations: improve the ability to identify and understand errors of judgment and choice, in others and eventually…](https://sms4smile.com/quotes/daniel-kahneman/so-this-is-my-aim-for-watercooler-conversations-improve-the-ability/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“For example, I recently came to doubt my long-held impression that adultery is more common among politicians than among physicians or lawyers.”](https://sms4smile.com/quotes/daniel-kahneman/for-example-i-recently-came-to-doubt-my-long-held-impression-that/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [Survival prospects are poor for an animal that is not suspicious of novelty.](https://sms4smile.com/quotes/daniel-kahneman/survival-prospects-are-poor-for-an-animal-that-is-not-suspicious-of/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“the idea of money primes individualism: a reluctance to be involved with others, to depend on others, or to accept demands from others.”](https://sms4smile.com/quotes/daniel-kahneman/the-idea-of-money-primes-individualism-a-reluctance-to-be-involved/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [Most of the moments of our life - and I calculated, you know, the psychological present is said to be about three seconds long;…](https://sms4smile.com/quotes/daniel-kahneman/most-of-the-moments-of-our-life-and-i-calculated-you-know-the/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“knowing little makes it easier to fit everything you know into a coherent pattern.”](https://sms4smile.com/quotes/daniel-kahneman/knowing-little-makes-it-easier-to-fit-everything-you-know-into-a/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [Experts don't know exactly where the boundaries of their expertise are.](https://sms4smile.com/quotes/daniel-kahneman/experts-don-t-know-exactly-where-the-boundaries-of-their-expertise-are/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [All of us would be better investors if we just made fewer decisions.](https://sms4smile.com/quotes/daniel-kahneman/all-of-us-would-be-better-investors-if-we-just-made-fewer-decisions/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes…](https://sms4smile.com/quotes/daniel-kahneman/the-best-we-can-do-is-a-compromise-learn-to-recognize-situations-in/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [“A happy mood loosens the control of System 2 over performance: when in a good mood, people become more intuitive and more creative but…](https://sms4smile.com/quotes/daniel-kahneman/a-happy-mood-loosens-the-control-of-system-2-over-performance-when-in/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) [Explore all 560 Daniel Kahneman quotes ](https://sms4smile.com/quotes/author/daniel-kahneman/) ## More Ceos quotes > [“It seems some CEOs who pay extremely large acquisition premiums … come to believe their own press.”](https://sms4smile.com/quotes/chip-heath/it-seems-some-ceos-who-pay-extremely-large-acquisition-premiums-come/) [Chip Heath](https://sms4smile.com/quotes/author/chip-heath/) > [The deck is still stacked in favor of those already at the top. And there's something wrong with that. There's something wrong when CEOs…](https://sms4smile.com/quotes/hillary-clinton/the-deck-is-still-stacked-in-favor-of-those-already-at-the-top-and/) [Hillary Clinton](https://sms4smile.com/quotes/author/hillary-clinton/) > [There's something to be said for CEOs' entering politics: In theory, they have management expertise and financial savvy. Then again, it didn't work so…](https://sms4smile.com/quotes/nicholas-kristof/there-s-something-to-be-said-for-ceos-entering-politics-in-theory/) [Nicholas Kristof](https://sms4smile.com/quotes/author/nicholas-kristof/) > [CEOs are paid for doing a terrible job. If the system wasn't so messed up, guys like me wouldn't make this kind of money.](https://sms4smile.com/quotes/carl-icahn/ceos-are-paid-for-doing-a-terrible-job-if-the-system-wasn-t-so-messed/) [Carl Icahn](https://sms4smile.com/quotes/author/carl-icahn/) > [You don't characterize CEOs as dealmakers or in any one particular area. An important characteristic of a CEO is leader. That's probably the most…](https://sms4smile.com/quotes/michael-ramsey/you-don-t-characterize-ceos-as-dealmakers-or-in-any-one-particular/) [Michael Ramsey](https://sms4smile.com/quotes/author/michael-ramsey/) > [I don't understand why people whose entire lives or their corporate success depends on communication, and yet they are led on occasion by CEOs…](https://sms4smile.com/quotes/frank-luntz/i-don-t-understand-why-people-whose-entire-lives-or-their-corporate/) [Frank Luntz](https://sms4smile.com/quotes/author/frank-luntz/) > [The shining star in the world is Shanghai. That's what CEOs from big companies say - 'if I want mathematical analytical work done, it's…](https://sms4smile.com/quotes/hans-rosling/the-shining-star-in-the-world-is-shanghai-that-s-what-ceos-from-big/) [Hans Rosling](https://sms4smile.com/quotes/author/hans-rosling/) > [The best board members aren't elected by default. CEOs that set themselves up with their choice of board member - which means getting more…](https://sms4smile.com/quotes/scott-weiss/the-best-board-members-aren-t-elected-by-default-ceos-that-set/) [Scott Weiss](https://sms4smile.com/quotes/author/scott-weiss/) > [If your cash is about to run out, you have to cut your cash flow. CEOs have to make those decisions and live with…](https://sms4smile.com/quotes/larry-ellison/if-your-cash-is-about-to-run-out-you-have-to-cut-your-cash-flow-ceos/) [Larry Ellison](https://sms4smile.com/quotes/author/larry-ellison/) > [My job is to find great ideas, exaggerate them, and spread them like hell around the business with the speed of light...And to put…](https://sms4smile.com/quotes/jack-welch/my-job-is-to-find-great-ideas-exaggerate-them-and-spread-them-like/) [Jack Welch](https://sms4smile.com/quotes/author/jack-welch/) > [CEOs need to produce continuous growth in sales and profits. Yet they must also invest in sustainability and social responsibility, which then leave them…](https://sms4smile.com/quotes/philip-kotler/ceos-need-to-produce-continuous-growth-in-sales-and-profits-yet-they/) [Philip Kotler](https://sms4smile.com/quotes/author/philip-kotler/) > [I went off to a school with the children of CEOs and diplomats. To be able to be at home with that group of…](https://sms4smile.com/quotes/james-green-somerville/i-went-off-to-a-school-with-the-children-of-ceos-and-diplomats-to-be/) [James Green Somerville](https://sms4smile.com/quotes/author/james-green-somerville/) > [CEOs and employers at for-profit corporations should not be able to prevent women from access to health care simply because of their own personal…](https://sms4smile.com/quotes/dan-maffei/ceos-and-employers-at-for-profit-corporations-should-not-be-able-to/) [Dan Maffei](https://sms4smile.com/quotes/author/dan-maffei/) > [“Things were different in the past. People idolized thinkers, philosophers, artists and scientists. Today the world admires CEOs, businessmen and managers. Basically, the people…](https://sms4smile.com/quotes/abhaidev/things-were-different-in-the-past-people-idolized-thinkers/) [Abhaidev](https://sms4smile.com/quotes/author/abhaidev/) > [When I look at founders and CEOs like Mark Zuckerberg at Facebook and Brian Chesky at Airbnb and Sebastian Thrun at Udacity, these are…](https://sms4smile.com/quotes/laura-arrillaga-andreessen/when-i-look-at-founders-and-ceos-like-mark-zuckerberg-at-facebook-and/) [Laura Arrillaga-Andreessen](https://sms4smile.com/quotes/author/laura-arrillaga-andreessen/) [Browse all 152 Ceos quotes ](https://sms4smile.com/quotes/about/ceos/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "“We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance. 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