Fired or Retired? A Competing Risks Analysis of Chief Executive Turnover*


  • *

     We thank Sarah Wilson and Guy Callaghan of Manifest Information Services Ltd as well as participants at the RES Conference 2008, the Center for Financial Studies Summer School and David Yermack for useful comments.


We apply duration analysis to model the tenure and mode of exit of CEOs from FTSE 350 companies from 1996–2005, a decade in which corporate governance reforms have sought to increase the accountability of the CEO to shareholders and their representatives on the board. We find a greater likelihood of dismissal in the latter part of the period. However, we also find that the likelihood of forced departure sharply decreases from the fifth year of a CEO's tenure. We find evidence that this is because CEOs who survive beyond year four are able to entrench themselves in their position.