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2018 | OriginalPaper | Chapter

Does It Pay off to Change the CEO? Changes in Operating Performance: Preliminary Results

Authors : Katarzyna Byrka-Kita, Mateusz Czerwiński, Agnieszka Preś-Perepeczo, Tomasz Wiśniewski

Published in: Contemporary Trends and Challenges in Finance

Publisher: Springer International Publishing

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Abstract

This study analysed operating performance associated with the CEO succession in companies listed on the Warsaw Stock Exchange. An event study based on accounting data was applied. Operating performance was calculated as median and mean ROA and EBITDA/TA ratios within 3 years after CEO appointments and compared to ratios’ results in the same period before the event. Abnormal operating performance for the entire sample was negative and statistically significant. After the event the operating performance did not improve following new CEO appointments or re-appointments. Obtained results indicate that CEO appointments decrease the value of the company. Companies performed better for re-appointments compared to new CEO appointments. However in case of new CEOs we observed small improvement within the first 2 years after the succession.

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previous chapter Contemporary Challenges in the Asset Liability Management

next chapter The Capitalistic Firm as a System that Produces Economic and Social Values

There is no EBITDA category in Polish profit and loss statement standard. EBITDA was calculated as a sum of operating profit/loss and depreciation.

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Title: Does It Pay off to Change the CEO? Changes in Operating Performance: Preliminary Results
Authors: Katarzyna Byrka-Kita
Mateusz Czerwiński
Agnieszka Preś-Perepeczo
Tomasz Wiśniewski
Publisher: Springer International Publishing
Book: Contemporary Trends and Challenges in Finance
Print ISBN: 978-3-319-76227-2

Electronic ISBN: 978-3-319-76228-9

Copyright Year: 2018
DOI: https://doi.org/10.1007/978-3-319-76228-9_16