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Prof. Rustom M. Irani
Associate Professor of Finance
Julian Simon Faculty Fellow
Gies College of Business
University of Illinois at Urbana-Champaign

Using hand-collected data on CEOs’ personal assets, we find that CEOs prioritize corporate investment projects that increase the value of CEOs’ private assets. Such projects are implemented sooner, receive more capital, and are less likely to be dropped. This investment strategy delivers large personal gains to the CEO but selects lower NPV projects for the firm and erodes its investment efficiency. CEO self-dealing is driven by public firms and disappears at smaller private firms where the agent is the principal. Overall, we
uncover CEOs’ private gains in capital budgeting.