Title
A Simple Model of Optimal CEO Turnover
Document Type
Preprint
Publication Date
3-30-2006
Abstract
We examine the board of directors’ problem of determining when to terminate a CEO. The optimal policy takes a simple form – the CEO is fired if profits fall below a critical value. The analysis yields the optimal probability of CEO turnover.
Keywords
corporate governance; real options; optimal stopping
Repository Citation
Brookman, J.,
Thistle, P. D.
(2006).
A Simple Model of Optimal CEO Turnover.
COinS