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| Author: | Kennedy, V. A. Limmack, R. J. |
| Title: | Takeover activity, CEO turnover, and the market for corporate control |
| Journal: | Journal of Business Finance and Accounting
1996 : MAR, VOL. 23:2, p. 267-294 |
| Index terms: | TURNOVER MERGERS CHIEF EXECUTIVE OFFICERS |
| Language: | eng |
| Abstract: | This paper examines the theory that takeovers act as a disciplinary mechanism on non-wealth maximising management. It explores the changing pattern of tarket CEO turnover in the years surrounding a takeover, and investigates whether CEO turnover is related to corporate performance. The following results were observed: (a) a significant increase in the rate of target company CEO turnover following the takeover; (b) poor pre-bid share price performance by target companies generally and in particular for those from which the CEO was subsequently removed; (c) no significant difference in target share price performance when bids were categorised as either hostile or friendly; (d) superior performance by acquiring companies over a period of up to five years prior to the bid. |
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