CEO turnover and director reputation

Felix von Meyerinck, Jonas Romer and Markus Schmid

Journal of Financial Economics, 2025, vol. 163, issue C

Abstract: This paper analyzes the reputational effects of forced CEO turnovers on outside directors. We find that directors interlocked to a forced CEO turnover experience large and persistent increases in withheld votes at subsequent re-elections relative to non-turnover-interlocked directors. Directors are not penalized for an involvement in a turnover per se but for forced CEO turnovers that are related to governance failures by the board. Our results challenge the widespread view that forcing out a CEO can generally be understood as a sign of a well-functioning corporate governance.

Keywords: CEO turnover; Director elections; Director reputation; CEO succession; Shareholder voting (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2025
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Working Paper: CEO Turnover and Director Reputation (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:163:y:2025:i:c:s0304405x24001946

DOI: 10.1016/j.jfineco.2024.103971

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