Journal of Management & Governance

, Volume 18, Issue 2, pp 541–587 | Cite as

The impact of CEO turnover on firm performance around interim successions

  • Vincent J. Intintoli
  • Andrew Zhang
  • Wallace N. DavidsonIII
Article

Abstract

Prior research reports that financial performance of firms that hire interim CEO successors is worse following interim CEO appointments than those that hire permanent successors. We find that this underperformance occurs only following voluntary turnover interim appointments, which represent a small fraction of all voluntary turnovers and roughly a quarter of all interim appointments. We do not observe poor performance when boards hire interim successors following instances of forced departure. Further analysis shows that poor performance during voluntary turnover interim successions are limited to using operating performance measures; market performance is not significantly worse following interim successions. Our results indicate that many interim appointments should not be viewed as value decreasing endeavors and future research on post-succession financial performance should consider the circumstances surrounding the turnover of the predecessor.

Keywords

CEO turnover Interim succession Corporate governance 

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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  • Vincent J. Intintoli
    • 1
  • Andrew Zhang
    • 2
  • Wallace N. DavidsonIII
    • 1
  1. 1.College of BusinessSouthern Illinois University CarbondaleCarbondaleUSA
  2. 2.College of BusinessThe University of Nevada Las VegasLas VegasUSA

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