That mansion on the hill may contain the ghost of a formerly effective CEO - even if the CEO in question is still technically alive.

According to Slate magazine, "The last two bubbles - the dot-com bubble of the 1990s and the real-estate bubble of this decade - have combined to create a new culture of real-estate voyeurism." Americans are fascinated in particular by the domiciles by the rich and the famous - and that includes CEOs. Academics partake of the obsession as well, and many wonder whether or not there is any correlation between the size of a CEO's, ahem, house and the health of his company's stock price. A paper entitled "Where Are The Shareholders' Mansions?" examines that relationship. Checking out the cribs of captains of industry is one of the final frontiers of corporate disclosure. "Thanks to Securities and Exchange Commission filings, the public can learn a great detail about the salaries, benefits, and perks that CEOs receive. But up until now, homes have generally been off-limits." Now, what with virtual tours available from Realtor.com of any old house on the market, this is no longer true.

The authors of "Where Are The Shareholders' Mansions?" acknowledge that the size of a CEO's house could be interpreted in a number of ways. One school of thought might contend that a CEO willing to invest vast sums in a house is giving himself a mandate "to bust his butt so that he'll have the cash to pay off the huge mortgage." Another - and to me a more convincing - theory is that CEOs who invest "gazillions" in gigantic houses may have become too comfortable and complacent, and that their personal expenditures reflect a growing indifference to costs that may simultaneously express itself in their running of the company. As a coda, the Slate article notes that, since Bill Gates moved into his "gargantuan home", Microsoft stock "has essentially moved sideways, significantly underperforming the market."

The study found that there is indeed a correlation between house size and stock price. After a survey that included 488 of the Fortune 500's CEOs, the companies of those CEOs whose houses (and adjacent property) exceeded the survey mean of "6,145 square feet, 12 rooms, 5.37 acres of land, and a market value of $3.1 million" returned 3.35 percent less than the companies of those CEOs who lived in estates below the survey mean. "And the CEOs who lived in the biggest homes (at least 10,000 square feet or over 10 acres) underperformed their peers who inhabited more modest homes by 6.9 percent, on average."

When the study narrowed its focus to those CEOs who bought houses after becoming CEOs, the results were even more pronounced. Again - especially for the purchasers of extremely large homes. According to Slate, "They found 'a significantly negative stock performance following the acquisition of very large homes by company CEOs,' on the order of 1.25 percent performance lag per month. The conclusion: 'We interpret the stock return evidence as consistent with large CEO home purchase indicating entrenchment and foreshadowing poor future stock performance.'" Worse yet, a good proportion of the CEOs were actually selling shares of their own stock, apparently to finance their homes, before the stock began to fall. Hmmm... One of the authors of the study remarked that it was almost as if these CEOs were looking for an alibi for the "bad faith" of selling off their own stock before their company went downhill.

"Haunted Mansion" from Slate