Session 198

Perspectives on CEO Succession

Track F

Date: Monday, October 12, 2009

 

Time: 12:45 – 14:00

Paper

Room: Meeting Room 3


Session Chair:
Guoli Chen, INSEAD

Title: Do You Get What You Pay For? Compensation of New CEOs Hired in Turnaround Situations

Authors

  • Guoli Chen, INSEAD

Abstract: This paper investigates the initial compensation package of new CEOs hired in turnaround situations. I argue that firms in turnaround situations pay their new CEOs more than do comparable firms that are not in turnaround situations, and that they tend to use a higher percentage of stock-based pay. Such relations are stronger for externally appointed CEOs. I further argue that higher pay attracts talented executives who are more capable, experienced, and well connected to acquire critical resources, and thus will improve post-succession performance. With 98 new CEOs hired in turnaround situations and 431 peers in non-turnaround situations, I find general support for my arguments. I discuss the implications of my study on CEO compensation, corporate governance and corporate turnaround literature.

Title: The Decision to Fire a CEO Immediately versus Retain a Lame Duck: Industry Factors

Authors

  • Richard Gentry, University of Mississippi
  • Jennifer Knippen, Eckerd College

Abstract: Much attention in the CEO succession domain has focused on predicting the antecedents of a CEO leaving his or her office. There has been a great deal of work focusing on what performance and environmental concerns lead to the a CEO leaving office and considerable effort focused on how a CEO can avoid being forced out. Much less examined is the process that firms adopt when the decision has been made to replace the incumbent CEO. This paper examines the effect of environmental factors on the likelihood of replacing the incumbent CEO immediately, versus using his/her tacit knowledge to ease the transition of the incoming CEO.

Title: The Effects of CEO Succession on Corporate Restructuring and Strategic Change

Authors

  • Shih-Chi Chiu, Nanyang Technological University
  • Richard Johnson, University of Missouri
  • Seemantini Pathak, University of Missouri - St. Louis
  • Robert Hoskisson, Rice University

Abstract: Drawing from behavioral agency theory, this paper examines the effects of CEO succession and CEO origin (inside versus outside) on the strategic actions of firms undergoing portfolio restructuring. We argue that differential risk orientations between insiders and outsiders can influence subsequent restructuring strategies. Counter to the conventional assumption regarding the strategic change associated with an outside succession, we argue that inside successors would perform more intense divestiture activities than outside successors due to more risk experienced by such insiders from outside owners. Additionally, we posit that insiders prefer selling related businesses and outsiders prefer selling unrelated businesses because of their different risk preferences. Finally, we examine the moderating effects of ownership concentration and board independence on reducing a CEO’s intention to select a restructuring strategy that helps minimize executive employment risk at the expense of shareholder interests.

Title: The Moderating Roles of Human and Social Capital in CEO Successions

Authors

  • Hao Chen, University of Texas-Dallas
  • Haibin Yang, City University of Hong Kong
  • Zhiang Lin, University of Texas at Dallas

Abstract: While there is a general recognition on the importance of firm performance in CEO successions, much less is known about the social and human capital conditions that may moderate such a relationship. This study develops a comprehensive theoretical framework of CEO successions based on the resource based view (RBV) and the social network perspective. We show how successors’ human and social capital, as complement and substitute for performance considerations, can alter how firms select their CEO successors (outsiders vs. insiders, as well as contenders vs. followers). Our initial analyses of the U.S. computer industry for 14 years have largely supported our framework.

All Sessions in Track F...

Sun: 10:00 – 11:30
Session 260: Writing Workshop for Doctoral Students and Junior Faculty
Sun: 13:00 – 14:30
Session 261: Shareholder Primacy and Corporate Policy
Sun: 15:00 – 16:30
Session 262: The Role of Government in M&A Activity
Sun: 16:30 – 17:30
Session 310: Corporate Strategy & Governance, IG Meeting
Mon: 12:45 – 14:00
Session 198: Perspectives on CEO Succession
Session 228: Business Groups, Alliances, and Contracts
Mon: 15:45 – 17:00
Session 229: Alliances and Corporate Strategy
Session 230: Ownership Determinants and Consequences
Mon: 17:15 – 18:30
Session 194: CEOs and Top Management Teams
Session 197: Diversity, Identity, and Corporate Governance
Session 233: Top Executives and Directors in Organizational Dynamics
Tue: 10:00 – 11:15
Session 199: Executive Compensation
Session 200: Social Psychological Perspectives of CEOs
Tue: 11:30 – 12:45
Session 195: Competitive Dynamics of Business Groups
Session 234: Constraints and Catalysts on Corporate Growth
Tue: 14:30 – 15:45
Session 226: Relatedness, Dominant Logics, and Other Diversification Logics
Session 231: Institutions and Agents
Wed: 10:00 – 11:15
Session 227: Corporate Strategy & Diversification
Session 232: Stakeholders in the Corporate Governance Equation
Wed: 11:30 – 12:45
Session 196: Behavioral Perspectives on Boards of Directors
Session 225: Acquisitions and Corporate Strategy


Strategic Management Society

Washington DC