Research news

Stanford study: Firing and Hiring the CEO

David Larcker, Brian Tayan (both of Stanford Graduate School of Business) and Edward Watts (of Yale School of Management) analyzed a sample of 1,399 CEO turnover events at Russell 3000 companies over the five-year period 2017 to 2021, including Push-out Scores. The researchers conclude: “We find a high association between stock-price performance and the likelihood that a CEO is pressured to leave. This indicates that Push-Out Scores provide informative assessments of whether a termination event is involuntary. It also indicates that boards might be more likely to hold CEOs accountable for performance than prior studies suggest.”

Read the research paper here.


Push-out Score™: The number you need to know

Who took the initiative? What triggered the move? Bad executive-firm match? Reluctant or happy to leave? Forced or voluntary departure? Performance-induced change? How intense was the pressure? Who turned their back on whom? More than one reason for the change? And why now? When a top manager leaves, many questions arise. exechange gets closer to the answer. Why did the top manager leave?

  • Reported reasons for departures are often not reliable.
  • Firms are not required to reveal the true reason for a departure.
  • An announced retirement may simply be a euphemism for a firing.

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