CEO Succession Roulette

44 Pages Posted: 2 Nov 2016 Last revised: 21 Jul 2019

See all articles by Dragana Cvijanovic

Dragana Cvijanovic

University of North Carolina Kenan-Flagler Business School

Nickolay Gantchev

Southern Methodist University (SMU) - Finance Department; European Corporate Governance Institute (ECGI)

Date Written: July 20, 2019


This paper studies the effects of succession planning on management turnover using hand-collected data on succession planning practices at U.S. public firms. Our tests highlight three dimensions in which succession planning impacts CEO turnover. Firms with succession plans (i) experience lower uncertainty around successions and faster learning about CEO ability, (ii) rely primarily on firm-specific information in CEO dismissals, and (iii) use more sophisticated performance metrics in evaluating their executives. Our findings are robust to the effects of firm and industry characteristics, and indicate that succession planning improves the efficiency and lowers the cost of management transitions.

Keywords: CEO turnover, succession planning, CEO labor market, CEO ability, performance evaluation

JEL Classification: G34, J24, J33, J41

Suggested Citation

Cvijanovic, Dragana and Gantchev, Nickolay, CEO Succession Roulette (July 20, 2019). Available at SSRN: or

Dragana Cvijanovic

University of North Carolina Kenan-Flagler Business School ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

Nickolay Gantchev (Contact Author)

Southern Methodist University (SMU) - Finance Department ( email )

United States
214-768-4128 (Phone)

European Corporate Governance Institute (ECGI) ( email )


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