코스닥 상장 벤처기업의 최고경영자교체에 관한 연구

An Empirical Study on the CEO Turnover of KOSDAQ Venture Firms: Focusing on Difference between the Manager-CEO and the Owner-CEO

The CEO manages the firm, glorying in its successes and taking the blame for its failures. The centrality of the CEO is reflected in the empirical literature on CEO turnover, which contributes the CEO turnover to poor firm performance. Less is known, however, about the sensitivity of CEO turnover between the owner-CEO and manager-CEO. In particular, this study investigates what financial factors, including performance, free cash flows, the efficiency of investing asset management, growth potential measured by R&D, and the monitoring variable proxied by the debt-equity ratio, influence the CEO turnovers and how the turnover sensitivity differs between manager-CEO and owner-CEOs. This research examined the relationship between the firm performance and the CEO turnover with total 736 sample observation about 151 venture firms, using the sample of KOSDAQ firms between 2000 and 2005. Results of the research show that 50 firms changed their CEOs during the sample period and there were 89 CEO turnovers. The tenure of the CEO turnover is average 2.94 years after the initial public offering. The performance, measured by EBITDA and net income, of firms with CEO turnover became worse prior to the CEO change than that of firms without CEO turnover and their difference is significant at conventional significance levels. The phenomenon is more evident for manager-CEO as opposed to owner-CEO. The research also finds that the probability of CEO turnover is lower for firms with owner-CEO than firms with manager-CEO, but firms with foreign investors’ ownership show high CEO turnover possibility. The study finds that the deterioration of the free cash flow also increase CEO turnover possibility, but such possibility is not evident between firms with owner-CEO and firms with manager-CEO. The results show that there was a significant increase in CEO turnover possibility when the efficiency of investment asset management and growth potential of venture firms deteriorate. The CEO turnover possibility becomes lower for firms with high debt-equity ratio than firms with low debt-equity ratio. This result supports the monitoring hypothesis. This research is noteworthy in investigating factors influencing the CEO turnover and in identifying differences between the owner-CEO turnover and the manager-CEO turnover. Findings of this study suggests that poor performance measured by EBITDA ratio, low free cash flows, low debt-equity ratio, poor efficiency of investing asset management and growth potential measured by R&D increase the possibility of CEO turnover. In particular, their influence on the turnover possibility is more evident to the manager-CEO firms than to the owner-CEO firms.