The impact of CEO turnover events on other executive turnover events: an empirical study of Japanese companies

Purpose Drawing on turnover event theory (TET), this study aims to investigate how CEO turnover influences the likelihood of turnover among the remaining top management team (TMT) members. It examines the direct link between CEO turnover and TMT member turnover, and whether TMT member power moderates this link. Design/methodology/approach The study used an unbalanced panel of non-CEO TMT members in Japanese listed firms (2010–2022). Random-effects panel logistic regression models with standard errors clustered at the firm level were used to estimate how CEO turnover events affect subsequent turnover of TMT members. Findings CEO turnover events significantly increased the likelihood of TMT member turnover. In addition, the positive relationship between CEO turnover and TMT member turnover was stronger among more powerful TMT members, indicating that influential executives are more likely to leave after a CEO turnover event. Originality/value This study offers three contributions. Firstly, it extends the CEO succession literature by empirically linking CEO turnover to TMT member turnover, an underexplored topic. Secondly, it shows the boundary conditions of this turnover contagion by identifying TMT member power as a key moderator. Thirdly, by testing the model in Japan, the study refines the TET by theorising how institutional and relational embeddedness shapes turnover contagion in upper echelon settings.