To split CEO or not to . In M&A game

 

APRIL 9, 2012 Monday  Companies Do Worse If They Split the CEO and Chairman Roles Under Pressure Companies that bow to investor pressure and split the CEO and board-chair positions, rather than allowing the CEO to hold both jobs, tend to fare worse than comparable firms on a number of metrics, says a team led by Aiyesha Dey of the University of Minnesota. For example, companies that make this change under pressure are associated with returns on assets that are 1.8% lower than companies that switched without pressure and 3.4% lower than control firms, on average. The findings contradict the view that board-leadership structures are created to meet the self-serving needs of CEOs and that splitting the roles will lead to performance improvements, the authors say. Source: To split or not to split?