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We estimate cumulative average abnormal returns for 2644 announcements of turnover in the chief executive officer (CEO) and Chair positions at 915 nonfinancial European companies between 2002 and 2021. Specifically, we determine investors’ reaction to news of simultaneous turnover in the two positions. Our results show, on average, that investors perceive turnover as a vehicle to enhance firm performance. Markets react negatively to the simultaneous exit of CEO and Chair and positively albeit insignificantly to simultaneous entry. There is mixed, insignificant reaction to cases of CEO exit and a new Chair. Markets respond unfavorably to simultaneous turnover in the CEO position but react positively to news of an incoming CEO and negatively to news of a CEO firing or exit. Our evidence shows that markets respond vigorously to news of changes in CEO than to changes in the Chair which are smaller and mostly insignificant.

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Are Investors More Reactive to Simultaneous Changes in Chief Executive Officer and Chair Positions?

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  • 发表日期：

    2025年

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  • Myriam García-Olalla,
  • Eleuterio Vallelado,
  • Jonathan Williams

摘要

We estimate cumulative average abnormal returns for 2644 announcements of turnover in the chief executive officer (CEO) and Chair positions at 915 nonfinancial European companies between 2002 and 2021. Specifically, we determine investors’ reaction to news of simultaneous turnover in the two positions. Our results show, on average, that investors perceive turnover as a vehicle to enhance firm performance. Markets react negatively to the simultaneous exit of CEO and Chair and positively albeit insignificantly to simultaneous entry. There is mixed, insignificant reaction to cases of CEO exit and a new Chair. Markets respond unfavorably to simultaneous turnover in the CEO position but react positively to news of an incoming CEO and negatively to news of a CEO firing or exit. Our evidence shows that markets respond vigorously to news of changes in CEO than to changes in the Chair which are smaller and mostly insignificant.