Document Type Master's Dissertation Author Van Zyl, Coral URN etd-03282010-115504 Document Title The impact of CEO turnover on the share price performance of South African listed companies Degree MBA Department Gordon Institute of Business Science Supervisor
Advisor Name Title Mt T Taylor Supervisor Keywords
- executive succession
Date 2008-04-08 Availability unrestricted Abstract
International research into the impact of CEO turnover on organisational share price performance has yielded inconsistent results. This research aims to study the impact of CEO turnover on the South African environment, and in particular on South African listed companies. The study is conducted looking at both the impact at the date of the announcement of the CEO change, and examines the impact of forced versus voluntary turnover, as well as internal versus external CEO replacement.
There were 74 turnover events between 2001 and 2003, which were included in the study at announcement date. Only 28 of these resulted in the CEO remaining in office for a period of at least three years, and this smaller sample was used to examine the effect of CEO turnover over the three years after appointment. Event study methodology was used in the research.
The research observed a statistically significant negative impact on share prices at the date of announcement of CEO turnover, but this was negated by statistically significant positive returns when looking at the day prior to the announcement. No statistically significant results were observed for internal versus external CEO replacement. Forced CEO turnover had a negative effect on share price performance when compare to voluntary turnover, but this was not statistically significant. No significant results were observed for the three years post the appointment of the new CEO. The conclusion of the research is that the impact of CEO turnover is not significant at announcement date or over time.
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Please cite as follows:
Van Zyl, C 2007, The impact of CEO turnover on the share price performance of South African listed companies, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03282010-115504/ >
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