Performance Changes Following Top Management Dismissals

Posted: 21 Feb 1995  

Diane K. Denis

University of Pittsburgh - Katz School of Business

David J. Denis

University of Pittsburgh

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Abstract

We examine the performance of firms experiencing a top management change over the period 1985-1988. Forced resignations are preceded by large and significant declines in operating performance and followed by large improvements in performance. However, forced resignations are rare and are due more often to external factors (eg. blockholder pressure, takeover attempts, etc.) than to normal board monitoring. Following the management change these firms significantly downsize their operations and are subject to a high rate of corporate control activity. Normal retirements are followed by small increases in operating income and are also subject to a slightly higher than normal incidence of corporate control activity following the management change.

JEL Classification: G34

Suggested Citation

Denis, Diane K. and Denis, David J., Performance Changes Following Top Management Dismissals. Available at SSRN: https://ssrn.com/abstract=5883

Diane K. Denis

University of Pittsburgh - Katz School of Business ( email )

368B Mervis Hall
Pittsburgh, PA 15260
United States
412-624-0296 (Phone)

David J. Denis (Contact Author)

University of Pittsburgh ( email )

Katz Graduate School of Business
Pittsburgh, PA 15260
United States
412-648-1708 (Phone)

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