CEO succession planning and market reactions to CEO turnover announcements

Jihun Bae, Jeong Hwan Joo and Jaeyoon Yu

Finance Research Letters, 2023, vol. 58, issue PA

Abstract: This study investigates how capital market investors assess CEO succession planning in the context of CEO turnover events. Conducting empirical tests using a manually collected sample of 676 CEO turnover cases, we find that CEO succession planning mitigates the negative association between CEO performance and market reactions to CEO turnover announcements. Further analyses reveal that our results are driven by firms with strong corporate governance. Overall, our findings suggest that CEO succession planning disclosure reduces investors’ concerns about firm performance in the event of CEO turnover.

Keywords: CEO turnover; CEO succession planning disclosure; Stock market reactions; Corporate governance (search for similar items in EconPapers)
JEL-codes: G14 G30 G34 M12 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323003185

DOI: 10.1016/j.frl.2023.103946

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