Boomerang CEOs: What Happens when the CEO Comes Back?

23 Pages Posted: 2 Aug 2019 Last revised: 23 Oct 2019

See all articles by Chris Bingham

Chris Bingham

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Bradley E. Hendricks

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Travis Howell

University of California, Irvine

Kalin Kolev

Marquette University - Department of Management

Date Written: July 1, 2019

Abstract

CEO successions represent critical junctures for firms. Although extant research explores the performance consequences resulting from different succession types, what remains underexplored is what happens when the firm rehires a former CEO (e.g., a “boomerang CEO”). Using a sample of over 6,000 CEO tenures, we examine the performance consequences of former CEOs who return to the firm. Our results suggest that these boomerang CEOs perform significantly worse than other CEOs, and that this effect is especially strong for firms in dynamic industries and when the boomerang CEO is a founder. Thus, the irony is that rehired CEOs may drag organizations backward instead of pushing them forward. Collectively, our findings contribute to the upper echelons and experience literatures.

Keywords: Upper Echelons, Corporate Governance, CEOs, Founders, Firm Performance

JEL Classification: G34, L2, M1

Suggested Citation

Bingham, Chris and Hendricks, Bradley E. and Howell, Travis and Kolev, Kalin, Boomerang CEOs: What Happens when the CEO Comes Back? (July 1, 2019). Kenan Institute of Private Enterprise Research Paper No. 19-27, Available at SSRN: https://ssrn.com/abstract=3429244 or http://dx.doi.org/10.2139/ssrn.3429244

Chris Bingham (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Bradley E. Hendricks

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
(919) 962-3619 (Phone)

Travis Howell

University of California, Irvine ( email )

4293 Pereira Dr
Irvine, CA 92697
United States
8016613377 (Phone)

Kalin Kolev

Marquette University - Department of Management ( email )

1250 W. Wisconsin Ave
Milwaukee, WI 53233
United States

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