CEO turnover in post-acquisition integration processes: Impact of individual characteristics and cross-border factor

Abstract: Chief executive officers are very important players in their organizations. They control company’s strategies and structure, and consequently are a crucial factor in its direction and performance. As a result, their replacement can be a critical juncture for organizations. Analyzing a sample of 429 acquisitions that happened between 2001-2007 in Europe and USA, I try to investigate whether or not CEO replacement/retention is more likely or less likely in cross-border acquisitions and how this relation is moderated by such individual characteristics of the CEO as age, tenure, CEO being the founder, multiple roles in the target and education. According to the results, CEOs having multiple roles and a longer tenure have higher chances to depart within three years in case of domestic acquisitions. Moreover, working in the instruments industry and the industry related to computer and office equipment has a positive impact on the CEO turnover within three years as well. The hypotheses regarding the lower CEO turnover rates in cross-border acquisitions comparing to the domestic ones that increase over time were supported.