Abstract

http://ssrn.com/abstract=1444062
 
 

References (43)



 
 

Citations (17)



 


 



Risk and CEO Turnover


Robert M. Bushman


University of North Carolina Kenan-Flagler Business School

Zhonglan Dai


University of Texas at Dallas - School of Management

Xue Wang


Ohio State University - Fisher College of Business

August 1, 2009


Abstract:     
This paper investigates how performance risk impacts a board’s ability to learn about a CEO’s unknown talent. We theorize that the information content of performance is increasing in idiosyncratic risk and decreasing in systematic risk. We provide robust empirical evidence that the likelihood of CEO turnover is increasing in idiosyncratic risk and decreasing in systematic risk, and that turnover-performance-sensitivity is also increasing in idiosyncratic risk and decreasing in systematic risk. We further investigate relations between the threat of termination and CEO compensation, documenting that for retained CEOs, both subsequent pay-performance-sensitivity and pay levels decrease in the probability of turnover.

Number of Pages in PDF File: 50

Keywords: CEO turnover, Idiosyncratic risk, systematic risk

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Date posted: August 7, 2009  

Suggested Citation

Bushman, Robert M. and Dai, Zhonglan and Wang, Xue, Risk and CEO Turnover (August 1, 2009). Available at SSRN: http://ssrn.com/abstract=1444062 or http://dx.doi.org/10.2139/ssrn.1444062

Contact Information

Robert M. Bushman
University of North Carolina Kenan-Flagler Business School ( email )
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-9809 (Phone)
HOME PAGE: http://public.kenan-flagler.unc.edu/faculty/bushmanr/

Zhonglan Dai (Contact Author)
University of Texas at Dallas - School of Management ( email )
2601 North Floyd Road
Richardson, TX 75083
United States
Xue Wang
Ohio State University - Fisher College of Business ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-688-1330 (Phone)
614-292-2118 (Fax)
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References:  43
Citations:  17

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