The impact of CEO turnover on firm performance around interim successions

Vincent Intintoli (), Andrew Zhang () and Wallace Davidson ()

Journal of Management & Governance, 2014, vol. 18, issue 2, 587 pages

Abstract: Prior research reports that financial performance of firms that hire interim CEO successors is worse following interim CEO appointments than those that hire permanent successors. We find that this underperformance occurs only following voluntary turnover interim appointments, which represent a small fraction of all voluntary turnovers and roughly a quarter of all interim appointments. We do not observe poor performance when boards hire interim successors following instances of forced departure. Further analysis shows that poor performance during voluntary turnover interim successions are limited to using operating performance measures; market performance is not significantly worse following interim successions. Our results indicate that many interim appointments should not be viewed as value decreasing endeavors and future research on post-succession financial performance should consider the circumstances surrounding the turnover of the predecessor. Copyright Springer Science+Business Media New York 2014

Keywords: CEO turnover; Interim succession; Corporate governance (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10997-012-9253-2

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