Key findings from the study:

  • On average, dismissed CEOs from listed companies earn 40 percent less over the following five years.
  • Fewer than 20 percent of these CEOs regain the same or higher salary.
  • One in nine CEOs in listed companies change jobs every year.
  • Roughly half of these jobs changes are dismissals.
  • 20 percent of the lowest-performing CEOs have a 60 percent risk of being fired within five years.
  • Among the 20 percent highest-performing CEOs, fewer than 20 percent change jobs over the next five years.
  • The most frequent reasons for dismissal are poor financial results and strategic disagreements.

About the researcher

  • Kasper Miesner Nielsen is a professor of finance at CBS
  • He is head of the Centre for Corporate Governance at CBS
  • He is also head of the Centre for Owner-Managed Businesses at CBS
  • Read more

New research: What it costs being dismissed as CEO

For the first time, a mapping of CEO turnovers in publicly listed companies shows that being dismissed can have serious long-term personal consequences for the CEO

06/11/2025

On average, being fired results in a 40 percent drop in income for CEOs over the following five years.

This is the conclusion of a research project that for the first time uses income data to track changes in salary and career development after a CEO is dismissed from a publicly listed company. The study also shows that very few of the dismissed executives are hired for equivalent roles in other listed companies.

“It is evident that dismissal has real consequences, but that is not the impression we typically get from the media, where CEOs often appear to walk away with one or two years’ salary – which can be a significant amount of money. But if we look a few years ahead, their personal loss is considerable,” says Kasper Meisner Nielsen. He is a professor of finance and head of the Centre for Corporate Governance at CBS.

'It turns out that one in two CEO changes is actually a dismissal - and that is quite a high share.'
Kasper Meisner Nielsen, professor

His research project, ‘Personal Costs of Executive Turnovers’, has been published in The Journal of Finance, the most prestigious international journal in the field of finance. In the project, Kasper Meisner Nielsen has systematically collected data on all CEO turnovers in listed companies in Denmark over a 30-year period from 1990 to 2021.

EVERY SECOND CEO TURNOVER IS A DISMISSAL

“I wanted to uncover two things: Does the board of directors step in and dismiss the CEO when the company performs poorly? And does dismissal actually have such severe consequences that it serves as a daily motivator to create value for shareholders?” says Kasper Meisner Nielsen and adds:

“That is why I looked at what happens to CEOs in the five years after their dismissal. How quickly do they land a new job and at what salary level? No one has studied that before,” he says.

His dataset includes more than 500 CEO changes. In roughly half of the cases, the change was the result of the board asking the CEO to find another job.

“It turns out that one in two CEO changes is actually a dismissal – and that is quite a high share. Part of the explanation lies in the financial crisis. Another part is that we tend to be relatively transparent about dismissals in Denmark compared to, for instance, USA. But the figures also show that boards do take action when the company underperforms,” says Kasper Meisner Nielsen.

ONLY A FEW CEOS MAKE A COMEBACK

According to Kasper Meisner Nielsen, losing 40 percent of income over five years is significantly more than what ordinary salary earners experience. For them, the average income drop after dismissal is around five to six percent over the following years.

Only a few CEOs manage to make a comeback at another listed company, and fewer than one in five regain the same or a higher salary.

“Apparently, being dismissed as a CEO leads the job market to reassess the individual’s leadership skills. As a result, they end up being offered a job with significantly lower pay. So being dismissed sends a strong negative signal,” the CBS researcher states and adds:

“It tells us that CEOs are expected to avoid losing their job; in other words, they have a strong incentive to create value for the company. On the other hand, they may also have an incentive to take less risk – to reduce the chance of being dismissed. It is a very fine balance.”

AN UNUSUALLY THOROUGH INVESTIATION

One of the reasons this income loss has not been studied before is that there are no systematic records of CEO salaries.

Listed companies do disclose executive salaries in their annual reports, however, once the CEO leaves the company, they also disappear from the financial reporting. To address this, Kasper Meisner Nielsen used his research access to income and wealth data from the Danish Tax Authority to track CEOs over time – before and after their job transitions.

Kasper Meisner Nielsen has also explored executive salary in previous research projects, where he found a link between pay and value creation: The highest-paid CEOs were also those who created the most value for shareholders.

The page was last edited by: Sekretariat for Ledelse og Kommunikation // 06/11/2025