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Abstract

We analyze changes in the composition of top management teams when a key member of the team (the chief executive officer [CEO]) departs. We find that the probability of non-CEO top manager turnover increases markedly around times of CEO turnover. Further, the magnitude of this increase depends on the relations between the tenure of the manager and tenures of the departing and incoming CEOs. Departure of a long-tenured CEO has a larger effect on turnover probability for a long-tenured non-CEO manager than for a short-tenured manager. Succession of a long-tenured manager as CEO has a larger effect on turnover probability for a short-tenured non-CEO manager than for a long-tenured manager. We argue that these findings are at least partially the result of complementarities across these groups of coworkers that affect the value of employment relationships between senior executives and firms. Copyright 2006, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/jleo/ewj002
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Article provided by Oxford University Press in its journal The Journal of Law, Economics, and Organization.

Volume (Year): 22 (2006)
Issue (Month): 1 (April)
Pages: 184-212

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Handle: RePEc:oup:jleorg:v:22:y:2006:i:1:p:184-212

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Find related papers by JEL classification:

• J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
• J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

References

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Citations

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Cited by:

1. Paul Oyer, 2006. "The Macro-Foundations of Microeconomics: Initial Labor Market Conditions and Long-Term Outcomes for Economists," NBER Working Papers 12157, National Bureau of Economic Research, Inc.
2. Augustin Landier & David Sraer & David Thesmar, 2005. "Bottom-Up Corporate Governance," Working Papers 2005-30, Centre de Recherche en Economie et Statistique.
   
   • Augustin Landier & Julien Sauvagnat & David Sraer & David Thesmar, 2013. "Bottom-Up Corporate Governance," Review of Finance, European Finance Association, vol. 17(1), pages 161-201.
   • Landier, Augustin & Sraer, David & Thesmar, David, 2006. "Bottom-Up Corporate Governance," CEPR Discussion Papers 5500, C.E.P.R. Discussion Papers.
   • Landier, Augustin & Sauvagnat, Julien & Sraer, David & Thesmar, David, 2013. "Bottom-up Corporate Governance," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
3. Anthony M. Marino & Ján Zábojník, 2008. "Work-related perks, agency problems, and optimal incentive contracts," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 565-585.
   
   • Anthony Marino & Jan Zabojnik, 2006. "Work-Related Perks, Agency Problems, and Optimal Incentive Contracts," Working Papers 1107, Queen's University, Department of Economics.
4. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883.
   
   • Edward P. Lazear & Paul Oyer, 2007. "Personnel Economics," NBER Working Papers 13480, National Bureau of Economic Research, Inc.
5. Robert S. Huckman & Jason Barro, 2005. "Cohort Turnover and Productivity: The July Phenomenon in Teaching Hospitals," NBER Working Papers 11182, National Bureau of Economic Research, Inc.
6. Alexandre Mas & Enrico Moretti, 2006. "Peers at Work," NBER Working Papers 12508, National Bureau of Economic Research, Inc.
   
   • Alexandre Mas & Enrico Moretti, 2009. "Peers at Work," American Economic Review, American Economic Association, vol. 99(1), pages 112-45, March.
   • Mas, Alexandre & Moretti, Enrico, 2006. "Peers at Work," CEPR Discussion Papers 5870, C.E.P.R. Discussion Papers.
   • Mas, Alexandre & Moretti, Enrico, 2006. "Peers at Work," IZA Discussion Papers 2292, Institute for the Study of Labor (IZA).
7. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2008. "Social capital in the workplace: Evidence on its formation and consequences," Labour Economics, Elsevier, vol. 15(4), pages 724-748, August.
   
   • Bandiera, O & Barankay, I & Rasul, I, 2008. "Social capital in the workplace: Evidence on its formation and consequences," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
8. Hadem, Michael, 2010. "Bedingungen und Konsequenzen des Wechsels von Finanzvorständen - Eine Analyse in großen börsennotierten Unternehmen," EconStor Theses, ZBW - German National Library of Economics, number 43681.

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