Fired or Retired? A Competing Risks Analysis of Chief Executive Turnover

We apply duration analysis to model the tenure and mode of exit of CEOs from FTSE 350 companies from 1996–2005, a decade in which corporate governance reforms have sought to increase the accountability of the CEO to shareholders and their representatives on the board. We find a greater likelihood of dismissal in the latter part of the period. However, we also find that the likelihood of forced departure sharply decreases from the fifth year of a CEO's tenure. We find evidence that this is because CEOs who survive beyond year four are able to entrench themselves in their position.