CEO retention, firm performance and corporate governance

This paper seeks to determine if CEO turnover is a function of firm performance, and therefore attempts to gauge the extent to which CEO interests are aligned with those of stockholders. The methodology in this paper focuses primarily on estimating the relationship between the probability of CEO exi...

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Bibliographic Details
Published in:Managerial and decision economics 1990-07, Vol.11 (3), p.167-176
Main Authors: Fizel, John L., Louie, Kenneth K. T.
Format: Article
Language:English
Subjects:
Academic achievement
Benefits
Boards of directors
Business structures
Chief executive officers
Company presidents
Compensation
Conditional probabilities
Corporate governance
Corporate profits
Corporations
Dividends
Effects
Efficiency, Industrial
Employee turnover
Executive compensation
Executives
Government performance
Probability
Profit margins
Profitability
Retention
Shareholders
Statistical analysis
Stock sales
Stockholders
Studies
Tenure
United States
Variables
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Description
Summary:This paper seeks to determine if CEO turnover is a function of firm performance, and therefore attempts to gauge the extent to which CEO interests are aligned with those of stockholders. The methodology in this paper focuses primarily on estimating the relationship between the probability of CEO exit and indices of firm performance and corporate governance structure. A major finding of the paper is that the accountability of CEOs to stockholders is significantly limited by CEO power, and CEO turnover is influenced more by internal governance structure than by firm profit or sales performance.
ISSN:0143-6570
1099-1468
DOI:10.1002/mde.4090110304