We find that optimal executive hiring decisions at the individual firm level can lead to reduced wealth for investors that hold a diversified portfolio of investments. We use a proven economic model to show costs are imposed on other firms in a portfolio when one firm hires externally. The model shows that the total unrecognized cost for a representative portfolio is about 0.5% per year of market value over the evaluation period. Empirical tests on this economic model, forced turnovers, and highly credentialed CEOs, along with a broad review of the literature, show no evidence that any of the imposed costs are materially mitigated by the value top executive external hires add at the firms they join. We provide recommendations for institutions seeking to reduce these previously unrecognized costs; our primary focus is on encouraging effective succession planning.