| dc.description.abstract | This thesis investigates the relationship between financial reporting data and the
board’s decision to dismiss a CEO. The analysis was performed on a sample of 30
CEO dismissals from S&P 1500 companies in the year of 2019. The financial data
of interest are proposed variables and ratios from companies’ income statements
and balance sheets, designed to give a deeper understanding of the phenomenon
of CEO dismissals. Variables were analysed in depth, seeing how they changed in
a period of five years leading up to the dismissal. Following the results from
t-tests, we found five significant variables, indicating that boards use these
actively to evaluate a CEO’s performance. Two of these, ROA and GPA, are
traditional performance measurements commonly brought up by research. The
three remaining significant variables, Current Ratio, Working Capital / Total
Assets, and Cash Balance / Total Liabilities, are all liquidity ratios. These indicate
that boards find liquidity as a valuable trait when assessing the overall health of a
company, arguably more important than the other traditional measurements of
performance. This is an important contributor to the already existing literature on
the topic, and gives a better overall understanding of how boards use financial
reporting data in their evaluation of CEO performance. | en_US |
