CEO fitness and firm value

We find that CEO fitness positively affects firm value (Tobin's Q). For each of the years 2001 to 2011, we define S&P 1500 CEOs as fit if they finish a marathon. Fit CEOs are associated with higher firm profitability and M&A announcement returns. Effects on firm value are strongest for CEOs with above-median age, above-median tenure and high workload, consistent with the positive impact of fitness on cognitive functions, performance and stress coping found in the literature. Our findings are robust to various tests for endogeneity, including CEOfirm fixed effects, time-varying firm and industry effects, reverse causality, permutation tests, and CEO sudden deaths. Results can explain the importance of fitness in the labor market and the trend among CEOs to stay fit.