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CEO Turnover and Ownership Structure: Evidence From the U.S. Property–Liability Insurance Industry
Author(s) -
He Enya,
Sommer David W.
Publication year - 2011
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/j.1539-6975.2011.01416.x
Subject(s) - underwriting , business , chief executive officer , stock (firearms) , liability , insurance industry , accounting , monetary economics , finance , actuarial science , economics , management , mechanical engineering , engineering
This article examines the impact of ownership structure on the relation between firm performance and chief executive officer (CEO) turnover in the U.S. property–liability insurance industry. Theoretical implications of stock versus mutual ownership structures on the performance–turnover relation are ambiguous. Our empirical results indicate that CEO turnover is less responsive to firm underwriting performance in mutual insurers compared to stock insurers. In fact, we find that while CEO turnover for stock firms is negatively related to prior performance, no such relationship is found for mutual insurers. These results hold while controlling for board structure and other relevant factors.