|
Get access now to all 12manage knowledge centers and discussion forums, including Chief Executive Officer. Completely free.
|
|
Jaap de Jonge Editor, Netherlands
|
In an interesting article "Long CEO Tenure Can Hurt Performance" (HBR March 2013) by Professor Xueming Luo, Vamsi K, Kanuri and Michelle Andrews results are disclosed from a study the authors did among 356 US companies between 2000 to 2010 analyzing the correlation between CEO tenure (~length of time serving in position of responsibility) and total shareholder returns.
The researchers found that CEOs create most shareholder value in their first years and argue this due to 2 factors:
- The firm-employee dynamic - This keeps improving the longer a CEO serves, growing shareholder value.
- The firm-customer dynamic - This strengthens only for a time and then weakens.
The optimal length of time served reported (for this group of companies in this period!) was actually 4,8 years...
Boards are advised to stimulate long-tenured CEO to keep spending a lot of time and effort on the firm-client relationship. To achive this, incentives plans for such leaders should focus heavily on consumer a (...) Read more? Sign up for free
X
All about Chief Executive Officer and business administration. Completely free.
Log in
|
|
Juergen P. Mueller MBA Business School Marketer, Germany
|
|
Reduction of CEO´s Dynamics and Shareholder Returns
Indeed it is important to look out for companies w (...)
|
|
|
Andrew Blaine Business Consultant, South Africa
|
|
The Best Length of Tenure for a CEO
In my opinion, the optimal length of tenure for a (...)
|
|
|
|
More on Chief Executive Officer
|
|
Copy this into your study materials:
and add a hyperlink to:
|
|
Copy this HTML code to your web site:
|
|
|
|
|
|
|