Organizational Form, Ownership Structure, and Top Executive Turnover: Evidence from the Property-Casualty Insurance Industry

51 Pages Posted: 18 Sep 2013

See all articles by Jiang Cheng

Jiang Cheng

Shanghai University of Finance and Economics - Department of Finance

J David Cummins

Temple University - Risk Management & Insurance & Actuarial Science

Tzuting Lin

National Taiwan University - Department of Finance

Date Written: June 28, 2013

Abstract

We investigate the role of organizational form and ownership structure in corporate governance by examining CEO turnover in the U.S. property-casualty insurance industry. The probability of non-routine turnover has a significant negative relationship with firm performance, and outside succession dominates when non-routine turnover occurs. Turnover probabilities vary significantly by organizational form and ownership structure. Closely-held stocks have lower non-routine turnover-performance sensitivity than publicly-traded stocks. The probability of non-routine CEO turnover is lower for mutuals than for closely held and publicly-traded non-family-owned stock firms. Family firms with family-member CEOs have the lowest turnover rate of any ownership type, and incoming successors in closely-held family firms mainly come from the controlling families.

Keywords: Organizational form, Ownership structure, CEO turnover, Family-owned firms, Mutuals, Closely-held stocks

JEL Classification: G22, G32, G34

Suggested Citation

Cheng, Jiang and Cummins, J. David and Lin, Tzuting, Organizational Form, Ownership Structure, and Top Executive Turnover: Evidence from the Property-Casualty Insurance Industry (June 28, 2013). Available at SSRN: https://ssrn.com/abstract=2326797 or http://dx.doi.org/10.2139/ssrn.2326797

Jiang Cheng (Contact Author)

Shanghai University of Finance and Economics - Department of Finance ( email )

Shanghai, 200433
China

J. David Cummins

Temple University - Risk Management & Insurance & Actuarial Science ( email )

Fox School of Business and Management
1801 Liacouras Walk.
Philadelphia, PA 19122
United States
215-204-8468 (Phone)
215-204-4712 (Fax)

Tzuting Lin

National Taiwan University - Department of Finance ( email )

1, Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

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