The timing of stock repurchases: Do well-connected CEOs help or harm?

Using a sample of daily repurchase transactions, we find that CEOs with extensive professional networks execute buybacks at higher prices relative to their less–connected peers. This finding survives a large battery of robustness tests and is unlikely to be the product of endogeneity biases. Monitoring by institutional investors, blockholders, and independent directors, as well as low levels of board busyness mitigate the detrimental effect of a well–connected CEO on repurchase timing. Moreover, better–connected CEOs are more associated with insider net sales around repurchase transactions. Overall, our evidence is consistent with CEO–shareholder agency conflict explanations and CEO power mechanisms.