Here is an interesting report from Daniel Bukszpan , CNBC.com:

In May 2011, Facebook CEO Mark Zuckerberg bought a $7 million home in Palo Alto, Calif. He doesn’t move in for a few months, so the address remains a closely guarded secret until the current occupants move out. However, a few details have emerged -- the 5,000-square-foot home has five bedrooms, five bathrooms and a pool. It’s not quite on the same level as Bill Gates’ 50,050-square-foot Washington mansion, but it’s not a bad start for a man whose last few homes were rentals.

Zuckerberg’s new home is beyond the reach of the average person’s checkbook. However, it’s downright modest by the standards of some powerful American CEOs. Some of the biggest names in executive leadership live in extravagant mansions with 25 bathrooms, four-story guest homes and sweeping vistas of the Pacific Ocean, all visible from a garden dotted with flora grown by celebrity botanist David Bellamy.


Steve Jobs, Apple, Inc.
Estimated Price: $2.6 million
Location: Palo Alto, Calif.
Beds/Baths: 7 bedrooms, 4 bathrooms, 1 half bathroom
Square feet: 5,678


Like many tech giants, Apple CEO Steve Jobs lives in Northern California. When he’s not dreaming up the next generation of technological marvels, he relaxes in the 5,678-square-foot Palo Alto mansion that he calls home. Built in 1920, the single-family property is located on over half an acre of land, and has 7 bedrooms, 4 bathrooms and one half bathroom.
Jobs was once the owner of a 17,000-square-foot mansion in Woodside, Calif. It was designed by architect George Washington Smith and built in 1925 for mining pioneer Daniel Jackling. In 2004, Jobs tried to have it demolished to make space for a new, contemporary home. After a dispute with local preservationists, the house was torn down in February 2011.
Bill Gates, Microsoft Corp. / Cascade Investment, LLC
Estimated Price: $122.4 million
Location: Medina, Wash.
Beds/Baths: 8 bedrooms, 25 bathrooms
Square feet: 50,050


Microsoft founder Bill Gates is the richest man in America. He used to be the company’s CEO, but in 2000 he stepped down and handed the executive reins to Steve Ballmer. Don’t worry, though, Gates is still the software giant's chairman. He's also currently CEO of Cascade Investment, a holding company whose interests include Berkshire Hathaway, Coca-Cola and Microsoft.
Gates’ 50,050 square foot estate in Medina, Wash., has 8 bedrooms, 25 bathrooms and 6 kitchens. It also has a 1,000-square-foot dining room, a swimming pool that pipes in underwater music, and a domed library with concealed bookcases, according to Forbes magazine.
Michael Dell, Dell, Inc.
2010 Tax Assessor’s Value: $18.5 million
Location: Austin, Texas
Beds/Baths: 8 bedrooms, 8 full bathrooms, 13 half bathrooms
Square feet: 33,000



Michael Dell is the CEO of his namesake company, Dell, Inc. The second-largest PC manufacturer in the world, it sits at number 41 on the Fortune 500 list, and according to The Austin American-Statesman, almost half of the revenue taken in by the city of Round Rock, Texas, comes from sales taxes generated by the company’s headquarters, which are located there.
Dell lives in a residence befitting a man who has brought so much revenue to his state. Built in 1997 at the height of the tech boom, his 33,000-square-foot Austin mansion is located on 20 acres of land, and in addition to its 8 bedrooms and 8 full bathrooms, it has 13 half bathrooms, indoor and outdoor swimming pools, and a conference room.
Evan Williams, Twitter, Inc.
Estimated Price: $2.4 million
Location: San Francisco
Beds/Baths: 5 bedrooms, 5 bathrooms, 1 half bathroom
Square feet: 3,001


Evan Williams is the founder and former CEO of Twitter, a social networking site that currently boasts well over 100 million users. He lives in the heart of San Francisco.
Williams recently relocated from a penthouse in the SoMa district to a property in the upscale Noe Valley neighborhood. The area is noted for its modern Victorian architecture, of which Williams’ home is a good example. The home, which Williams purchased for $2.4 million, occupies just over 3,000 square feet, and includes a yard and a guest house.
Hubert Guez, Ed Hardy
Price: $23.5 million
Location: Holmby Hills, Los Angeles
Beds/Baths: 7 bedrooms, 13 bathrooms
Square feet: 17,171



When Michael Jackson died in June 2009, he was renting a 7-bedroom mansion for $100,000 a month. His landlord was Hubert Guez, better known as the CEO of the Ed Hardy brand, and even though Jackson was a mere tenant and not the homeowner, he was truly renting in style.
The mansion is located in Holmby Hills, an affluent Los Angeles neighborhood. It was built in 2002 and modeled after a French chateau. Guez bought it in 2004 for $18.5 million, and he originally listed it for $38 million. Despite the swimming pool, wine cellar, guest house and 12 working fireplaces, Guez simply couldn’t get a buyer at that price, and it was lowered to $28 million, and then $23.5 million. The listing remains active today.

It is now a well-established part of the mythology of American capitalism that Warren Buffett still lives in the same modest brick colonial in Omaha, pictured above, that he bought in 1958 for $31,000. (According to Forbes magazine's annual survey of billionaires' houses, here, Buffett's home had a 2003 tax valuation of $700,000.) Intuitively, we believe that the relative modesty of Buffett's home tells us something about his values and priorities, just as we all probably make certain assumptions about the values and priorities of the occupants of the truly execrable miniature Versailles mansions that have sprouted in recent years on the far-flung fringes of most American cities --even Cleveland, for God's sake!



According to Kevin M. LaCroix:

In one of the more interesting and entertaining articles I have read in a long time, Crocker Liu of the Arizona State University Business School and David Yermack of N.Y.U. Business School take a look at what else the size and valuation of CEOs' homes might tell us. In their March 2007 article entitled "Where Are The Shareholders' Mansions? CEOs' Home Purchases, Stock Sales, and Company Performance" (here), the authors' "central research question concerns the association between CEO real estate purchases and subsequent performance of their company."

The authors developed their hypotheses by questioning whether a CEO's home purchase more nearly indicates the CEO's commitment to their company and its community, or rather represents the CEO's "entrenchment," particularly if the CEO is unconcerned about liquidating their assets (especially their holdings in company shares) and investing in an expensive home so as to provide "a public signal about the executive's status and security."

In order to determine which hypothesis is accurate, the authors undertook some rather creative detective work to identify the homes of the CEOs of the S & P 500 companies (including, among other things, each home's location, size, valuation, date of acquisition, and method of financing). The authors ultimately were able to identify the homes of 488 of the CEOs, 164 of which the CEOs had acquired after taking office.

What the authors found out about the CEOs' homes is fascinating. The median CEOs' home is more than 5,600 square feet, and sits on over one and a quarter acres. The median 2006 market valuation of the CEOs' homes is $2.7 million (although this may be understated because some of the homes are sufficiently unique that there are no ready market valuations). 12% of CEOs' homes are on the waterfront, and 8.5% are on golf courses. The median distance from the office for CEOs' homes is 12.5 miles, but 16 of the CEOs live more than 1,000 miles from their company headquarters and another 16 live between 250 and 1,000 miles from their office.

With respect to the question about the correlation between the CEO's home purchase and company performance, the authors found that when a CEO buys a home, "future company performance is inversely related to the CEO's liquidation of company shares and options" to finance the transaction, even if the stock sales are small relative to the CEO's holdings. The authors also found that "future performance deteriorates when CEOs acquire extremely large or costly mansions or estates," regardless of the method of financing. The authors found a "significantly negative stock performance following the acquisition of very large homes by company CEOs," a negative trend that persists for several years after the home purchase.

The authors' assessment of this finding is that the CEO who purchases his or her home without selling shares is perhaps signaling their commitment to the company and expectation of future stock returns. The CEO who liquidates his or her shares to finance their home purchase , or buys a very expensive home, is signaling his or her perception of his or her status and security, and therefore the purchase represents a proxy for CEO "entrenchment."

The authors contend that these facts suggest an investment strategy, essentially shorting the shares of companies whose CEOs who acquire very large and expensive homes, but maintaining long positions on the companies whose CEOs acquired their homes without selling company shares. According to the authors, both ends of this strategy would substantially outperform the companies taken as a whole.

I find the authors' work intriguing, but I wonder whether the apparent link between the CEO's home valuation and corporate performance might not be a manifestation of what a former colleague of mine poetically calls "multicollinearity." That is, is the inverse correlation between CEO home valuation and corporate performance simply the quantification of another phenomenon - for example, the level of CEO compensation?

For the record, Buffett's home was not among the houses the authors studied, since Berkshire Hathaway inexplicably is not a part of the S & P 500. The authors' data set also does not include Bill Gates' $140 million, 66,000 square foot home, since he is no longer the CEO of Microsoft. Steve Ballmer's $8 million, 4,100 square foot home was included, however.

I am hoping that the authors' next article will compare the valuations of CEOs homes to those of the leading securities class action plaintiffs' lawyers. I suspect it would provide even more interesting analysis.