Risk and CEO turnover

• 成果类型: Article
• 署名作者: Bushman, Robert; Dai, Zhonglan; Wang, Xue
• 署名单位: University of Texas System; University of Texas Dallas; University of North Carolina; University of North Carolina Chapel Hill; Emory University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.03.001
• 发表日期: 2010
• 页码: 381-398
• 关键词: CEO TURNOVER; idiosyncratic risk; systematic risk; ceo compensation

摘要

This paper investigates how performance risk impacts a board's ability to learn about the unknown talent of a chief executive officer (CEO). We theorize that the information content of performance is increasing in idiosyncratic risk and decreasing in systematic risk. We provide robust empirical evidence that the likelihood of CEO turnover is increasing in idiosyncratic risk and decreasing in systematic risk and that turnover performance-sensitivity is also increasing in idiosyncratic risk and decreasing in systematic risk. We further investigate relations between the threat of termination and CEO compensation, showing that for retained CEOs, both subsequent pay-performance-sensitivity and pay levels decrease in the probability of turnover. (C) 2010 Elsevier B.V. All rights reserved.