Does CEO Succession Planning Create Shareholder Value?

55 Pages Posted: 16 May 2018 Last revised: 13 Jun 2018

See all articles by John J. McConnell

John J. McConnell

Purdue University

Qianru Qi

Fudan University; New York University (NYU)

Date Written: June 4, 2018


Average cumulative abnormal returns around proxy statements containing “in-depth” disclosures of planning for CEO succession are significantly positive indicating that succession planning is a value-added undertaking. Exploiting a quasi-natural experiment based on a 2009 SEC ruling that induced more succession planning disclosures, we find that succession planning is value-enhancing only for larger, older, more complex firms with lower stock return volatility. Analyses of CEO turnover events support the proposition that in-depth disclosure of succession planning is a credible signal of actual planning. Further analyses indicate that succession planning is value-reducing for firms that “should not” plan for CEO succession.

Keywords: CEO succession, CEO turnover, proxy statement disclosures

Suggested Citation

McConnell, John J. and Qi, Qianru, Does CEO Succession Planning Create Shareholder Value? (June 4, 2018). Available at SSRN: or

John J. McConnell

Purdue University ( email )

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Qianru Qi (Contact Author)

Fudan University ( email )

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Shanghai, 100045

New York University (NYU) ( email )

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