CEO Turnover and Corporate Governance: Evidence from the Stockholm Stock Exchange
Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
The relationship between performance and CEO turnover is examined by studying companies listed on the Stockholm Stock Exchange A-list, from 1994 to 2001. Given the significance of the CEO in an organisation, this paper examines factors affecting the probability of forced CEO turnover. A significant and negative relationship between adjusted stock return and the likelihood of a CEO turnover is found, which implies that the performance-turnover relation is displayed in stock prices and that owners evaluate the CEOs performance using market values. In the forced turnover sample there is evidence of an inverse relation between departures and profit margin. Hypotheses in the paper states that strategic investors with special insights and knowledge about the firm should be better monitors compared to institutional investors, implying that ownership structure should affect the likelihood of CEO turnover. If this is the case it is not revealed in our data.
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IdentifiersURN: urn:nbn:se:su:diva-3748OAI: oai:DiVA.org:su-3748DiVA: diva2:193113