We study the effects of job market conditions at the start of future CEOs' careers. We find no evidence of persistent rewards for US public firms' CEOs for starting their career in more successful firms, or for the luck of entering the job market in a good economy. Rather, we show that long-term effects are countercyclical as those executives who start their careers in a recession earn a higher CEO pay, consistent with selection. We also find that initial job conditions may yield a higher first CEO compensation but the positive effect dissipates over time. While related labor market research points to procyclical cohort effects and suggests that favorable initial conditions positively affect careers in the long run, our findings support the notion that the market for CEOs is efficient.
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