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Perk consumption and CEO turnover

Author

Listed:
  • Yifan Zhan

    (University of Nottingham Ningbo)

  • Hung-Gay Fung

    (University of Missouri)

  • Wai Kin Leung

    (University of Nottingham Ningbo)

Abstract

This study examines the relationship between perk consumption and forced CEO turnover. The results based on Chinese firms indicate that the likelihood of forced CEO turnover increases with excess perk consumption by executives. The positive effect of excess perk consumption on CEO dismissal declines when the firms are momentum winners in market returns and profitability while it rises when firms are momentum losers. Non-co-opted independent directors amplify the positive effect of excess perks on forced CEO turnover whereas board gender diversity reduces such likelihood. Better educated CEOs appear to consume fewer excess perks, reducing the likelihood of forced turnover.

Suggested Citation

  • Yifan Zhan & Hung-Gay Fung & Wai Kin Leung, 2024. "Perk consumption and CEO turnover," Review of Quantitative Finance and Accounting, Springer, vol. 62(4), pages 1525-1568, May.
    • Handle: RePEc:kap:rqfnac:v:62:y:2024:i:4:d:10.1007_s11156-023-01241-5
    DOI: 10.1007/s11156-023-01241-5
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    More about this item

    Keywords

    Forced CEO turnover; Excess perks; Momentum losers and momentum winners; Board characteristics; CEO self-discipline;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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