A study by three finance professors into 75,000 Danish companies has found that the profitability of a company increases by 7% after the CEO’s mother-in-law dies.

We swear we are not making this up.

This interesting study and its results are from a front page story in today’s Wall Street Journal (subscription required).

The study is part of an emerging — and controversial — area of financial research that delves into the lives and personalities of executives in search of links to stock prices and corporate performance. The trend is an outgrowth of the tendency to lionize CEOs as critical to the businesses they lead. If their performance is so vital, the researchers say, investors should want to know anything that could affect it.

The study also found that the profitability decreased 21.45% in the two years after the death of a child and 14.7% after the death of a spouse.

The three professors who conducted the study are Daniel Wolfenzon of New York University’s Stern School of Business, Morten Bennedsen of Copenhagen Business School and Francisco Pérez-González of the University of Texas.

Other researchers into CEO behavior and stock performance/profitability have come up with equally interesting results.

For instance, professors David Yermack of New York University and Crocker Liu of Arizona State University have seen patterns in the stock performance of companies and buying or building large houses:

[S]tock performance tended to deteriorate after a CEO bought or built an extremely large or costly estate, which they defined as over 10,000 square feet or sited on more than 10 acres. On average, these companies’ stocks underperformed the S&P 500 index by about 25 percentage points over the three years after the purchase.

Wait, there’s more. The two professors found that investors buying stock of CEOs with modest houses would have outperformed the market by 15% points.

Oh, by the way although the mother-in-law’s death does seem to boost profits, it’s considered statistically insignificant by the scholars who did the study.