CEO Turnover in the Foodservice Industry: Is There a Relationship to Key Financial Performance?

Abstract

The foodservice industry has grappled with turnover at the operational level for many years, and at the managerial level turnover appears to be greater than in other industries. At the corporate level, it appears to be increasing; what's more, the individuals at this level (executive managers and boards of directors) are ultimately responsible for the strategic direction and financial success of a business, and excessive turnover could affect the capacity for growth and constrain profitability. This study examined the relationship between firm performance and CEO turnover in the restaurant segment of the hospitality industry. Logistic regression indicates that negative stock and accounting returns can be a good predictor of turnover. In addition, the results of this study suggest another stage of life cycle development, representing rebirth or a “postlisting life cycle.”