How stigmatized are dismissed chief executives? The role of character questioning causal accounts and executive capital in dismissed CEO reemployment

Research Summary: Despite the prevalence of CEO dismissal, theory only briefly explores its consequences. Past research indicates few fired CEOs regain employment. We suggest dismissal stigmatizes executives; however, stigmatization is greatest when character questioning causal accounts exist, which affect the likelihood of regaining a CEO position. Furthermore, we argue that reputational and social capital provide signals of executive quality that moderate the level of stigmatization experienced when character questioning causal accounts exist. Following 280 dismissed CEOs, we find that social capital increases the likelihood of rehiring for those with character questioning causal accounts, but negatively impacts those without causal accounts. Alternatively, we find reputational capital positively influences those without causal accounts, while having a slight negative relationship for those with causal accounts. Managerial Summary: Dismissed CEOs often desire second chances to run companies; however, few are ever afforded the opportunity. We explore what allows some dismissed CEOs to regain employment as a CEO. We find that reasons surrounding a CEO's dismissal influence such prospects depending on the CEO's prior reputation and social capital. In particular, social capital through elite education increases the likelihood of regaining a position when the CEO's character is called into question. Alternatively, a strong reputation increases the likelihood of regaining a CEO position when a CEO's character has not been called into question. These findings suggest that dismissed CEOs can regain a CEO position; however, this likelihood is strongly influenced by how others perceive the executive and their concerns about prior behavior.