The study covers most of the CEOs of S&P 500 companies. If the CEO's house was larger than the average -- about 6,000 square feet -- then the company's stock underperfomed by about 3.35%. In the case of mega homes -- 10,000 square feet or more -- those stocks underrperfomred by 6.9%.
Here's how the authors, Crocker H. Liu and David Yermack put it in their study "Where are the Shareholders' Mansions? CEOs' Home Purchases, Stock Sales, and Subsequent Company Performance":
"When a CEO buys real estate, future company performance is inversely related to the CEO's liquidation of company shares and options for financing the transaction. We also find that, regardless of the source of finance, future company performance deteriorates when CEOs acquire extremely large or costly mansions and estates. We therefore interpret large home acquisitions as signals of CEO entrenchment." (Full study)
Among those CEOS whose home you might have coveted but whose stock you mght have avoided -- HIlton Hotels Co-Chairman and CEO Stephen F. Bollenbach and the former boss of Power-One, Steven Goldman.