Performance comparison between CEO turnover and term-expiration succession
Bon-kyung Koo
In this study I examine cause from human resource activity understanding that corporate governance improvement campaign doesn't clearly reflect financial structure improvement and firm value improvement. If we consider importance of corporation culture in Korea sociaty, we realize CEO existence in organization environment. In this study I examine impact affecting CEO managerial activity on firm value. After considering tenure cycle to see influence affecting on long-term performance, I study performance difference in CEO succession before and after CEO term-expiration. It is generally used annual data of just before year or the end of a year in past study in spite of happening CEO turnover timing irregularly. I use quaterly data to minimize information reflection loss about CEO's long-term performance. I compare firm value profitability with growth between CEO turnover and CEO term-expiration succession after controlling several organization environmental and CEO characteristic variables. I discover in having a high performance after CEO turnover better than term-expiration succession in various results. It appears that corporations prefer term-expiration succession to CEO turnover because of taking a risk. It can be seen not by past financial performance but by relating CEO managerial activity in organization environment. I judge that it is difficult in maintaining revitalization of professional CEO regime in Korea corporation sociaty as long as not having managerial transparency. It appears that owner management is more effective CEO turnover immediately in non-chaebol firm.
CEO turnover,term-expiration,organization,ownership,performance
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