Executive compensation has increased dramatically over the past 15 years, but so has forced CEO turnover. We argue that part of the development of CEO pay can be explained by the adverse consequences that forced turnover implies for a CEO. We find that for the CEOs of the largest US corporations, a

performance evaluation, executive turnover, and the politics of CEO pay.

We thank the editor and anonymous reviewers for extremely helpful comments and suggestions. We are also grateful to Steve Kaplan, Lucian Bebchuk, Julian Franks, Eric C. Chang, and the participants of the 2007 Summer Workshop on Industrial Organization and Management Strategy (IOMS) and the 2008 Chinese Economist Society (CES) Annual Meeting in Tianjin for comments. We thank China Center for Financial Research (CCFR) at Tsinghua University for providing Tsinghua Financial Data (THFD) and assistance. All remaining errors are ours.

We examine the pattern of top executive turnover among small non-listed businesses in Japan using a unique panel data set of about 25,000 firms for 2001-2007 and find the following. First, the likelihood of a change in top executive among non-listed firms is independent of their ex-ante performance

decisions. The board is the shareholders ’ first line of defense against incompetent management; in extreme cases, it wilt replace an errant chief executive officer (CEO). Discussing boards ’ effectiveness in this role, Jensen (1986) claims that ‘the internal control mechanism of corporations, which

Abstract This paper analyzes executive turnover and firm valuation in Italy, a country that features all the characteristics of the most common governance structure around the world, as described by La Porta, et al. (1999): low legal protection for investors, firms with large controlling

Despite the crucial role played by managers in changing the functioning of labour markets in transition economies, research on the determinants of executive pay and CEO turnover in these countries is almost non-existent. The current paper aims at adding to this minuscule literature

. Whilst dividing the roles of CEO and chairman reduces the entrenchment of the CEO, the number of non-executive directors has no impact on the probability of his dismissal following poor firm performance.

We examine the relationship between the optimal incentive contract and the firm’s decision to fire a manager for poor performance. We first derive some theoretical results using a simple principal-agent model, and then examine the empirical evidence on the incidence of forced turnover among CEOs

This study examines the relationship between the turnover of high-level executives and firm performance in Taiwan. Prior studies of executive turnover focus solely on changes to a firms ’ Chief Executive Officer (CEO), Board of Director (BOD) Chair, or Chief Financial Officer (CFO). This study