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Revisiting the Performance of Firms Recognized for Creating a Healthy Culture
Brian C Payne1, Jeff S Bredthauer
1University of Nebraska at Omaha, College of Business Administration, Omaha, NE (Dr Payne and Dr Bredthauer).
Objective:
To augment several prior JOEM studies, which associated firms with recognized health and safety programs with outsized firm stock performance.
Methods:
Stock performance of CHAA and C. Everett Koop National Health Award winners are analyzed using standard asset-pricing, risk-adjusted modeling to compare them against benchmark stock portfolios.
Results:
While wellness programs are laudable, the firms did not universally outperform a market benchmark over extended periods when controlling for well-established measures of portfolio risk.
Conclusions:
Investors could have also expected to underperform the market based on the excess risk involved with these selected companies. Investors must recognize that adding these award-winning companies to their portfolios also increases the overall riskiness and volatility of their portfolios. The previously documented outsized returns could be the reward for bearing this additional risk.JEL categories: G11, G51, J26, J32.
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