Does CEO Succession Planning (Disclosure) Create Shareholder Value?

forthcoming in the Journal of Financial and Quantitative Analysis

49 Pages Posted: 16 May 2018 Last revised: 18 Apr 2022

See all articles by John J. McConnell

John J. McConnell

Purdue University

Qianru Qi

Telfer School of Management

Date Written: June 22, 2021

Abstract

Cumulative abnormal returns around proxy statements containing “in-depth” disclosures of planning for CEO succession are significantly positive indicating that succession planning is a value-adding undertaking. Further analyses, including exploiting a 2009 SEC ruling that induced more disclosures of succession planning, indicate that succession planning is not a one-size-fits-all undertaking in that succession planning is value-enhancing only for larger, older, more complex firms with lower stock return volatility. Other analyses support that in-depth disclosure of succession planning is a credible signal of actual planning and that in-depth disclosure of succession planning is value-reducing for firms that “should not” plan for succession.

Keywords: CEO succession, CEO turnover, proxy statement disclosures

Suggested Citation

McConnell, John J. and Qi, Qianru, Does CEO Succession Planning (Disclosure) Create Shareholder Value? (June 22, 2021). forthcoming in the Journal of Financial and Quantitative Analysis, Available at SSRN: https://ssrn.com/abstract=3176648 or http://dx.doi.org/10.2139/ssrn.3176648

John J. McConnell

Purdue University ( email )

MGMT, KRAN
403 West State St.
West Lafayette, IN 47907-2056
United States
765-494-5910 (Phone)
765-494-7863 (Fax)

Qianru Qi (Contact Author)

Telfer School of Management ( email )

Ottawa, Ontario
Canada
6136186781 (Phone)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
347
Abstract Views
2,103
Rank
157,565
PlumX Metrics