Abstract

THE INFLUENCE OF NETWORKS ON CEO TURNOVER, APPOINTMENT AND COMPENSATION

Baljinder Kaur, Dr. Pinki

Volume: 2 Issue: 3 2012

Abstract:

CEO appointments, working and compensation are only some of the CEO labor market outcomes that I analyze. For this reason, I make a distinction between the CEO's overall connectedness and the strength and structure of the CEO's individual connections to the board. In my research, I've discovered that both types of interdependence contribute to conventional measures of turnover and pay in separate and very important ways. Deepening CEO ensconcement is facilitated by specialized connections. The likelihood of a CEO leaving, the sensitivity of the company to CEO turnover in terms of performance, and the speed with which a former CEO can find new employment all increase as the CEO's overall network size grows. If a corporation opts to hire an outsider for the position of CEO, having connections to the board of directors increases the candidate's chances of being selected. Last but not least, CEOs that have stronger overall connections earn more money. The research reveals that a chief executive officer's (CEO) ties outside of the current company's board of directors have a significant and distinct economic impact on the company's bottom line.

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