Changes in bank profitability Post-CEO succession: Does prior CEO experience improve bank performance?

Douglas Cumming, Peigong Li, Feng Zhan and Wanwan Zhu

The British Accounting Review, 2025, vol. 57, issue 4

Abstract: Based on a unique hand-collected dataset of CEO succession events in US bank holding companies (BHCs), we find that prior CEO experience of the newly appointed CEO improves bank profitability post-CEO succession, but primarily in underperforming banks. We distinguish prior CEO experience based on where the experience was obtained and find that the performance effect is driven by the experience gained outside the bank. Moreover, our study indicates that new CEOs with previous CEO experience acquired outside the bank are more likely to enhance profitability through earnings manipulation than those who obtained CEO experience within the bank or those without any previous CEO experience.

Keywords: CEO succession; Prior CEO experience; Bank profitability; Earnings manipulation (search for similar items in EconPapers)
JEL-codes: G21 G34 J24 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:57:y:2025:i:4:s0890838924002804

DOI: 10.1016/j.bar.2024.101500

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