Do Delaware CEOs Get Fired?

43 Pages Posted: 11 Dec 2008 Last revised: 23 Jan 2016

Murali Jagannathan

State University of New York (SUNY) at Binghamton

Adam C. Pritchard

University of Michigan Law School

Date Written: January 20, 2016

Abstract

Critics have charged that state competition in corporate law, which Delaware dominates, leads to a “race to the bottom” making management unaccountable. One metric of management accountability is forced CEO turnover, which we use to test the race-to-the-bottom hypothesis. We find that Delaware CEOs are more likely to be forced out relative to firms incorporated in other jurisdictions. After controlling for differences in firm characteristics, we find that firms incorporated in Delaware are still more likely to terminate CEOs, but that termination decision is less sensitive to poor performance.

Keywords: Corporate governance, charter competition, CEO turnover

JEL Classification: G30, G34, K22

Suggested Citation

Jagannathan, Murali and Pritchard, Adam C., Do Delaware CEOs Get Fired? (January 20, 2016). U of Michigan Law & Economics, Olin Working Paper No. 08-024. Available at SSRN: https://ssrn.com/abstract=1313274 or http://dx.doi.org/10.2139/ssrn.1313274

Murali Jagannathan (Contact Author)

State University of New York (SUNY) at Binghamton ( email )

P.O. Box 6015
Binghamton, NY 13902-6015
United States
607-777-4639 (Phone)

Adam C. Pritchard

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4048 (Phone)
734-647-7349 (Fax)

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