Department of Finance


Date of this Version



Published in Journal of Financial Research 23:3 (Fall 2000), pp. 373–390. Copyright © 2000 Blackwell Publishing Limited. Used by permission.


We analyze the effect of CEO tenure on the relation between firm performance and forced turnover. We find that the performance-forced turnover relation is conditional on CEO tenure. Our results suggest a constant negative relation between firm performance and forced turnover throughout an inside CEO’s tenure. Founders are entrenched early in their careers but held accountable for firm performance later in their careers. We find evidence that outside hires experience a probationary period, followed by a period of apparent entrenchment during their intermediate years that weakens later in their tenure.