The Impact of CEO Turnover on Insider Trading

本文探討高階經理人撤換與內部人交易之關係。由1987年到2006年的高階經理人撤換資料，我們發現在高階經理人撤換期間前後，內部人交易有異常之情形。在高階經理人撤換之前，內部人會賣出他們的持股；在經理人撤換之後，他們會買回股票。這樣的情況和公司內外部的資訊不對稱有關，公司內部人擁有較多的訊息。公司內部不同階層的員工、舊的高階經理人離開原因與新的高階經理人的任命，都會影響這段期間的內部人交易。在強制撤換經理人，與任命公司外部人士擔任高階經理人的公司，經理人撤換期間會有比較大量的內部人交易。越高層級的經理人，他們本身的交易情況就更明顯。另一方面，我們也發現可以利用高階經理人撤換前的內部人交易情形來預測公司在經理人撤換後的整體表現。因此，本文驗證了高階經理人撤換與內部人交易之間的關係。This article examines the relation between CEO turnover and insider trading. Using 1894 CEO changes from 1987 to 2006, we find that there are abnormal insider transactions around CEO turnover. Insiders sell shares before CEO turnover and buy shares after the turnover. Different insider group, departure type, and succession type of the turnover influence insider trading around CEO turnover. Forced departure and outside succession turnovers have much insider trading around the replacements. Senior executives also have more incentive to do insider trading. We also find pre-turnover insider trading can be a predictor of firm post-turnover performance.I. Introduction 1I. Literature Review 3II. Hypothesis 7V. Data and Methodology 12A. CEO Turnover 12B. Insider Trading Data 14C. Matching Portfolio for Insider Trading 15D. Insider Trading and Post-turnover Performance 16. Empirical Results 17A. CEO Turnover and Firm Performance 17B. Insider Trading around CEO Turnover 19C. Transaction among Different Insiders 21D. Insider Trading for Forced versus Voluntary Departure 24E. Insider Trading for Outside versus Inside Succession 25F. Predictor of Post-turnover Performance 27I. Conclusion 30eferences 3