Abstract

Citations (19)

Beta

CEO Turnover after Acquisitions: Are Bad Bidders Fired?

Kenneth Lehn
University of Pittsburgh - Finance Group

Mengxin Zhao
University of Alberta - School of Business

Journal of Finance, August 2006
AFA 2004 San Diego Meetings

Abstract:
We examine the relation between bidder returns and the probability of CEO turnover in acquiring firms. Using a sample of 714 acquisitions during 1990 to 1998, we find that 47% of CEOs of acquiring firms are replaced within five years, including 27% by internal governance, 16% by takeovers, and 4% by bankruptcy. A significant inverse relation exists between bidder returns and the likelihood of CEO turnover. This relation is not associated with governance structure. It also is not significantly different in stock versus cash acquisitions, which appears to be inconsistent with Shleifer and Vishny's theory of stock market driven acquisitions.

Keywords: CEO, Turnover, Acquisition, Governance, and Control

JEL Classifications: G34

Accepted Paper Series

Date posted: June 12, 2006 ; Last revised: June 12, 2006

Suggested Citation

Zhao, Mengxin and Lehn, Kenneth, CEO Turnover after Acquisitions: Are Bad Bidders Fired? . Journal of Finance, August 2006; AFA 2004 San Diego Meetings. Available at SSRN: http://ssrn.com/abstract=444360

Export to: Export Citation What's this?

Contact Information

Kenneth Lehn (Contact Author) University of Pittsburgh - Finance Group ( email ) 372 Mervis Hall Pittsburgh, PA 15260 United States 412-648-2034 (Phone)
Mengxin Zhao University of Alberta - School of Business ( email ) 2-43 Business Building Edmonton, Alberta T6G 2R6 T6G 2C7 Canada

Abstract

Citations (19)

Date posted: June 12, 2006 ; Last revised: June 12, 2006

Suggested Citation

Contact Information

Kenneth Lehn (Contact Author)

Mengxin Zhao