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.

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.

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.

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.