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Former CEO advisors and firm performance

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  • Ogoe, Satoshi
  • Suzuki, Katsushi

Abstract

Using unique data on former CEOs taking advisory positions in their former firms in Japan, we investigate the determinants of advisor selection and how this impacts firm performance. We found that retiring CEOs with higher accounting performance and more co-opted boards are more likely to serve in advisory positions than those with lower accounting performance and fewer co-opted boards. Additionally, firms with their own former CEOs as advisors tend to perform worse than those without such advisors. Finally, we found that firms with former CEO advisors have lower turnover performance sensitivity toward successor CEOs than those without. These results imply that influential CEOs may become advisors and be involved in successor management even after retirement, which may not be beneficial to shareholders.

Suggested Citation

  • Ogoe, Satoshi & Suzuki, Katsushi, 2023. "Former CEO advisors and firm performance," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23001002
    DOI: 10.1016/j.pacfin.2023.102034
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    References listed on IDEAS

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    More about this item

    Keywords

    Advisor; CEO turnover; Corporate governance; Co-opted board; Retirement compensation;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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