CEO Selection, Succession, Compensation, and Firm Performance: A Theoretical Integration and Empirical Analysis

This study seeks to extend and unify a set of research issues relating to CEO selection,succession, compensation, and firm performance. The study offers a model of these issues from a combined agency and organizational perspective, and tests the model using archival data and perceptual data from survey responses from 118 CEOs of the largest U.S. corporations. The results suggest that several CEO issues are significant predictors of variation in firm performance, supporting the paper's arguments for (1) a reinterpretation of the insider/outsider CEO distinction, (2) the relevance of CEO succession planning, and (3) the importance of CEOs' perceptions of the linkage between their personal wealth and firm wealth.