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Monitoring By The Financial Press And Forced Ceo Turnover, Kathleen A. Farrell, David A. Whidbee
Monitoring By The Financial Press And Forced Ceo Turnover, Kathleen A. Farrell, David A. Whidbee
Department of Finance: Faculty Publications
This paper examines Wall Street Journal news stories about 79 firms that forced CEO turnover and a matched sample of firms that did not force CEO turnover. In the two years prior to turnover, firms in the forced-turnover sample were the subjects of 76% more news stories about poor firm performance despite being from the same industry, of similar size, and similar performance as a sample of matched firms. Overall, the evidence suggests that scrutiny of poor firm performance by the financial press increases the likelihood of forced CEO turnover.