Jogiyanto Hartono

Change of company ownership, CEO turnover and the origin of CEO: case from Indonesia

This study aims to provide empirical evidence that the action on the Chief Executive Officer (CEO) turnover is in line with the change in ownership structure. Data of CEO is collected originally from all companies in Indonesia during 1999−2007. The CEO substitution of selected companies was only taken until the turnover to the year 2003, and during the four years after the turn was never replaced. The result from our study cannot find the relationship between corporate ownership changes and CEO turnover in Indonesia. However, the study finds a statistically significant result on the relationship between CEO turnover and accounting performance. Furthermore, the result of study also showed that the companies with poor performance over several years before turnover tended to choose a new CEO from external, rather than the corporate with relatively good financial performance. The owners expect the CEO successor from external parties can bring changes to the company through new policies.