Coworker Complementarity and the Stability of Top-Management Teams

Rachel M. Hayes, Paul Oyer () and Scott Schaefer

The Journal of Law, Economics, and Organization, 2006, vol. 22, issue 1, 184-212

Abstract: We analyze changes in the composition of top management teams when a key member of the team (the chief executive officer [CEO]) departs. We find that the probability of non-CEO top manager turnover increases markedly around times of CEO turnover. Further, the magnitude of this increase depends on the relations between the tenure of the manager and tenures of the departing and incoming CEOs. Departure of a long-tenured CEO has a larger effect on turnover probability for a long-tenured non-CEO manager than for a short-tenured manager. Succession of a long-tenured manager as CEO has a larger effect on turnover probability for a short-tenured non-CEO manager than for a long-tenured manager. We argue that these findings are at least partially the result of complementarities across these groups of coworkers that affect the value of employment relationships between senior executives and firms. Copyright 2006, Oxford University Press.

Date: 2006
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Working Paper: Co-worker Complementarity and the Stability of Top Management Teams (2005)
Working Paper: Co-Worker Complemetarity and the Stability of Top Management Teams (2004)
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