The Effects of Succession Choice Surrounding CEO Turnover Announcements: Evidence from Marathon Successions

This study examines marathon successions, which I define as top executive searches that are extended past the formal departure notice of the incumbent chief executive officer (CEO). Marathons should be used when search costs are high and when little time passes from when the incumbent steps down to...

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Bibliographic Details
Published in:Financial management 2013-03, Vol.42 (1), p.211-238
Main Author: Intintoli, Vincent J.
Format: Article
Language:English
Subjects:
Analysis
Appointments, resignations and dismissals
Business structures
Capital expenditures
Chief executive officers
Corporate governance
Cost analysis
Employee turnover
Enterprises
Executive dismissals
Financial management
Hiring
Incumbents
Industry
Marathons
Modeling
Political succession
Proxy statements
Studies
Succession
Succession planning
Surprise
Tenure
Wall Street
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Summary:This study examines marathon successions, which I define as top executive searches that are extended past the formal departure notice of the incumbent chief executive officer (CEO). Marathons should be used when search costs are high and when little time passes from when the incumbent steps down to when they leave the firm. Consistent with these predictions, marathons primarily follow surprise departures and forced turnovers. Marathons are also likely for firms operating in heterogeneous industries that face early tenure incumbent departures. These findings shed light on an increasingly prevalent form of succession and provide insight into the rationale and implications behind the announcement.
ISSN:0046-3892
1755-053X
DOI:10.1111/j.1755-053X.2012.01215.x