CEO Turnover in Reverse Splits

Li-Hsun Wang (), Chu-Hsiung Lin () and Hsien-Ming Chen ()
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Li-Hsun Wang: Department of International Business Administration, Wenzao Ursuline College of Languages, 900 Mintsu 1st Rd., Kaohsiung 80793, Taiwan, R.O.C.
Chu-Hsiung Lin: Department of Risk Management and Insurance, National Kaohsiung First University of Science and Technology, 2 Juoyue Rd., Kaohsiung 81164, Taiwan, R.O.C.
Hsien-Ming Chen: Department of Finance, Chang Jung Christian University, 396 Chang Jung Rd., Sec. 1, Kway Jen, Tainan 71101, Taiwan, R.O.C.

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2010, vol. 13, issue 03, 403-416

Abstract: This study examines the application of CEO turnover on reverse stock splits firms. Using Taiwanese samples, we find that non-CEO turnover firms receive negative long-term abnormal returns, and their financial performances continue to decline following reverse splits. These findings are consistent with prior studies. Contrarily, neither significantly negative long-term abnormal returns nor changes on financial performance were found for CEO turnover firms. This study concludes that applying CEO turnover is suggestive in reverse splits. Additionally, we find that reverse split firms raise debt and concern with their short-term solvency following splits.

Keywords: Reverse splits; CEO turnover; long-term price performance; financial performance (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1142/S0219091510002001

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