CEO Turnover and Director Reputation

82 Pages Posted: 8 Feb 2021 Last revised: 18 Feb 2024

See all articles by Felix von Meyerinck

Felix von Meyerinck

University of Zurich - Department of Banking and Finance

Jonas Romer

University of St. Gallen - Swiss Institute of Banking and Finance

Markus Schmid

University of St. Gallen - Swiss Institute of Banking and Finance; University of St. Gallen - School of Finance; Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: February 16, 2024

Abstract

This paper analyzes the reputational effects of forced CEO turnovers on outside directors. We find that directors interlocked to a forced CEO turnover experience large and persistent increases in withheld votes at subsequent re-elections relative to non-turnover-interlocked directors. Directors are not penalized for an involvement in a turnover per se but for forced CEO turnovers that are related to governance failures by the board. Our results challenge the widespread view that forcing out a CEO can generally be understood as a sign of a well-functioning corporate governance.

Keywords: CEO turnover, director elections, director reputation, CEO succession, shareholder voting

JEL Classification: G32, G34

Suggested Citation

von Meyerinck, Felix and Romer, Jonas and Schmid, Markus, CEO Turnover and Director Reputation (February 16, 2024). University of St.Gallen, School of Finance Research Paper No. 2021/06 , Proceedings of the EUROFIDAI-ESSEC Paris December Finance Meeting 2022, Swiss Finance Institute Research Paper No. 23-87, Available at SSRN: https://ssrn.com/abstract=3774434 or http://dx.doi.org/10.2139/ssrn.3774434

Felix Von Meyerinck

University of Zurich - Department of Banking and Finance ( email )

Plattenstr 32
Zurich, 8032
Switzerland

Jonas Romer

University of St. Gallen - Swiss Institute of Banking and Finance ( email )

Rosenbergstrasse 52
St. Gallen, CH-9000
Switzerland

Markus Schmid (Contact Author)

University of St. Gallen - Swiss Institute of Banking and Finance ( email )

Unterer Graben 21
St. Gallen, 9000
Switzerland

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

Swiss Finance Institute

c/o University of St. Gallen
Dufourstrassse 50
St. Gallen, SG 9000
Switzerland

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
445
Abstract Views
2,902
Rank
97,266
PlumX Metrics