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Military Experience and Corporate Tax Avoidance
From the battlefield to the boardroom: How military CEOs shape corporate tax strategyÂ
Key takeaways:
A CEO's military background significantly influences their company's approach to taxes, with firms led by veterans having higher tax rates and engaging in less aggressive tax avoidance.
CEO-specific factors, especially military experience, explain a large portion of the differences in corporate tax strategies between companies, even more so than firm characteristics.
Companies with military CEOs not only pay higher tax rates, but also maintain lower reserves for uncertain tax positions and utilize fewer tax havens.
Boards that hire military CEOs tend to get more conservative tax planning, but also benefit from less aggressive financial reporting in other areas that would otherwise require greater governance.
Firms with veteran CEOs avoid less tax than firms without the CEOs.
Veteran CEOs are shrinking in the executive labor markets.