Revealing the revealed preferences of public firm CEOs and top executives: A new database from credit card spending

Abstract

Research Summary: We introduce a new database which provides an unprecedented window into the off-the-job lives and interests of public firm top executives as reflected by their personal income allocation. We construct this database by matching household credit card spending data with the population of executives in Execucomp. To overcome the significant computational challenges associated with matching these data, we build on the statistical record-linking literature in a way that allows us to generate reliable matches with limited information. To facilitate research exploring new questions made possible with this database, we make our matching crosswalk freely available for academic use. Managerial Summary: This article describes the matching procedures associated with the development of a database which sheds new light on the revealed preferences of public firm top executives. Prior work on upper echelons has routinely stressed how preferences and characteristics of top executives often manifest in firm behaviors and are important predictors of firm outcomes. Nevertheless, the lack of a reliable paper trail capturing executive preferences, particularly at a large scale, has been a friction slowing comprehensive empirical research on this topic. We describe how we address this limitation by linking top executives listed in the database Execucomp with credit card spending data provided by the consumer data provider L2 and outline a number of new research questions made possible by our matching efforts. The results of our matching efforts (Execucomp-L2 unique identifier crosswalk) are available at https://github.com/dfehder/FRT_2022_SMJ_CEO_TopExec_Preferences.