Getting a sunburn from reflected glory? How award-winning CEOs of competing firms affect CEO dismissal

While prior research has mostly focused on the impacts of winning awards on CEOs and their firms, we explore how award-winning CEOs may be a social-structural factor that affects the dismissal of other CEOs in the same industry. We propose that boards are more likely to dismiss CEOs who did not win awards (non-winners) when competitors’ CEOs won awards. Negative earnings surprise and board liberalism can reinforce this relationship. In contrast, the similarity between directors and non-winners reinforces can weaken the relationship. We find consistent support for our theory using a longitudinal sample of 857 publicly traded companies in the United States from 2006 to 2015.
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