Management turnover through deaths of key executives: effects on investor wealth

Article Abstract:

The impact of the death of key executives on stock performance was measured, using data from 127 corporations over a fifteen-year period in which 220 corporate officers died. The announcement of a key executive's death did not significantly affect stock performance on the first day, and there was a generally positive reaction on the stock market during the first 30 days after the announcement of death. For purposes of this study, death announcements used appeared in the Wall Street Journal. When the executives were broken down into subgroups of chairmen, CEOs, and CEO-chairmen, the results were somewhat different. Strong negative returns tended to occur when CEO-chairmen died unexpectedly, or when a highly visible executive closely associated with the company died.

Economic aspects, Stocks, Securities, Appointments, resignations and dismissals, Corporations, Executives, Chief executive officers, Valuation, Corporate officers

---

Layoff announcements and stockholder wealth

Article Abstract:

Researchers have largely ignored the strategic implications of layoffs. With the passage of the Worker Adjustment and Retraining Notification Act, many managers are anguishing about the consequences of layoff announcements for their firms and shareholders. We tested the reaction of the securities' market to announcements of 194 layoffs. Investors reacted negatively to announcements attributable to financial reasons. Negative preannouncement reactions occurred when negative hints about firms preceded announcements, and announcements of large or permanent layoffs elicited stronger negative responses than other announcements. (Reprinted by permission of the publisher.)

Research, Investors, Layoffs

---

Stockholder reactions to departures and appointments of key executives attributable to firings

Article Abstract:

The study investigated investors' reactions to announcements of the firings of key executives made over a 25-year period 1963-1987. We found announcements containing information about permanent replacements to be associated with positive market reactions, whereas other types of firing announcements resulted in no market response. In addition, outsider appointments were perceived as beneficial immediately, while insider appointments elicited a wait-and-see reaction. (Reprinted by permission of the publisher.)

Evaluation, Executive dismissals

Similar abstracts:

• Abstracts: Microsoft to face tough claims of unfair tactics against Java. U.S. signals new focus in Microsoft case; Apple and AOL evidence suggests the next step of Government's attack
• Abstracts: AT&T plans to name Tobias to direct overseas lines in bid to speed growth. In a new offensive, AT&T reassigns Nacchio to fight long-distance rivals
• Abstracts: McCaw to alter phone network for computers. Oracle and McCaw to broadcast data to computers on airwaves
• Abstracts: Sun challenges Microsoft's hold over software. Digital plans charge of up to $1 billion in quarter to cut more jobs in fiscal '93
• Abstracts: Software preferences still mark Europe as the Old World; applications like painting, selling well in U.S., lag behind venerable standbys

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.