Title page for ETD etd-03282010-115504


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.

2007 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria

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/ >

G10/219/ag

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