Will Succession Planning Increase Shareholder Wealth ? Evidence from Investor Reactions to Relay CEO Successions  

Oleh:

Wei, Shen ; Cannella, Albert A., [Jr.]

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Strategic Management Journal vol. 24 no. 2 (2003), page 191-198.
Topik: ceo; CEO succession; succession planning; firm performance; shareholder wealth; event study

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS30.11 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Our study examines investor reactions to a specific form of succession planning - relay succession. Theory predicts that both the initiation and the outcome of a relay CEO succession process will influence shareholder wealth. Our results show that investors geenrally do not react to the initiation of the process as indicated by heir apparent appointment, but react negatively when the process ends in heir appaprent exit from the firm and react positively when the process ends in heir apparent promotion to the CEO position. We also found a strong positive investor reaction so outside CEO promotion and a negative investor reaction to nonheir inside CEO promotion. Further, firm performance exerts an important influence on the wealth effect of heir apparent promotion and exit.

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