Career Concerns of Top Executives, Managerial Ownership and CEO Succession
Bibliographic record
Abstract
ABSTRACT Manuscript Type: Empirical Research Question/Issue: We hypothesize that a top manager's stock ownership in the firm signals to the board information about his or her privately known ability to run the company. As a consequence, the outcome of a CEO succession is affected by the managers’ ownership choices, which therefore depend on their career concerns. Research Findings/Results: Our study of CEO turnover events in US firms provides support for our basic hypothesis. Specifically, we find that (1) lower insider ownership makes outside CEO succession more likely; (2) higher ownership by an insider increases his or her chances of promotion; (3) non‐appointed managers with higher ownership are more likely to reduce their ownership stake or to leave the firm following CEO succession; and (4) ownership reduction and departure decisions are more likely following outside CEO appointments. Theoretical Implications: Consistent with signaling theory, our analysis suggests that (1) managerial ownership plays a role in resolving asymmetric information problems between top managers and the board of directors in the context of CEO succession, and (2) managers’ portfolio decisions and their departure decisions are driven in part by their career opportunities in the firm. Practical Implications: By monitoring managerial ownership decisions surrounding CEO turnover, boards of directors can acquire information about the potential candidates’ ability to run the firm and thus better identify the best successor. As managers can more easily signal their information to the board when their ownership choices are observable to the public, security laws that encourage the disclosure of managers’ beneficial ownership stakes may increase the efficiency of boards’ choices and firm value.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.001 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.002 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".