Abstract
In this chapter we examine the consequences of cartel detection for the career of CEOs in the US and the EU; the characteristics of colluding CEOs (such as tenure and age); shareholder’s awareness of management misbehavior, and their role in punishing or encouraging them. Additionally, we examine at what level cartel decisions are made according to the available case documents.
We find that only 4% of all CEOs in cartel firms convicted between 1998 and 2020 by the EC are explicitly fired as a result of cartel participation, and that 30% of CEOs indicted between 1985 and 2011 in DOJ cartel cases are fired. Most often, CEOs remain in place or take on other high-level positions in the firm, such as board chairmanships. This suggests that (the majority) of shareholders are not trying to prevent their managers from colluding, and therefore that the expected sanctions are still too low to deter cartels through appropriate changes in corporate governance. This is particularly the case in the EU, where fines are less severe than in the US and there are neither criminal sanctions nor treble damages.