CEO Approval in Social Media and Turnover
48 Pages Posted: 27 Jan 2018 Last revised: 20 May 2018
Date Written: May 11, 2018
Using a unique social media dataset that captures the level of employee satisfaction in S&P 1500 firms, this paper explores its relationship with CEO turnover and firm performance. Our results show that firms with lower CEO approval level on average experience poor performance and higher CEO turnover. We do however find that the performance-turnover sensitivity is less pronounced for firms with highly approved CEOs, a view consistent with the manager-worker alliance hypothesis. Our findings highlight the board’s difficulties in replacing poorly-performing CEOs with high popularity among employees. We conclude that employee opinions matter for major internal governance decisions and suggest factors beyond performance as determinants of CEO turnover.
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