We investigate whether markets anticipate the potential loss of firm value in the event of the CEO falling sick and eventually dying of COVID-19 in a sample of almost 3,000 firms from across 137 regions in 10 European countries. We use soccer games as “super-spreader” events to instrument the regional number of infected cases per capita. There is a significant drop in stock returns during March and April 2020 associated to firms run CEOs older than 60 years. This result vanishes when the cases are not instrumented, and when we replace the company’s CEO with the Board Chair or other Board members. Returns bounce back in May for the same firms after the incidence of the pandemic receded in Europe.
COVID-19 and the Value of CEOs