Comparing Outgoing Female CEOs With Prior CEO Experience To Outgoing Female CEOs With No Prior CEO Experience

Abstract

It is difficult for females to climb the corporate ladder to the CEO position. Most of the previous research examines the obstacles that prevent females from reaching top management positions and ultimately the top position of CEO. In this study we examine this issue from the opposite side, i.e., we examine CEO successions were the outgoing CEO is female and the incoming CEO is male. We distinguish between outgoing female CEO successors who have prior CEO experience and those who do not have prior CEO experience. We find that prior CEO experience is positively related to the outgoing female CEO total compensation in the year preceding the succession, positively related to firm performance and negatively related to the probability of firm bankruptcy in the three years preceding the succession. Prior CEO experience is also positively related to the percentage of female and ethnic minority directors on the board in the two years preceding the succession.