We have previously examined the relationships between returns and CEO appointments HERE. Our findings suggested that new CEOs drive share prices down, relative to other companies with no CEO changes.

After updating the analysis for FY24 & FY25, the trend seems to have held.

This trend may be due to new CEOs performing worse than prior experienced leadership, incoming CEOs unearthing and cleaning out the rubbish, or just the market uncertainty with change. Cynics may even suggest that new CEOs seek to immediately write down assets having a bad day in order to maximise TSR performance for more lucrative realised incentive value down the track.

This may also just be a case of getting what you pay for; new CEOs, typically recruited from within on lower pay relative to the prior CEO because they lack CEO experience.

To test this, we analysed the differences in Total Fixed Remuneration (TFR) between outgoing and incoming CEOs, as well as the 6-month TSR before and after a new CEO’s start.

Methodology

The analysis scope is ASX 100 companies during the years 2020 to 2025.

• Total Fixed Remuneration (TFR) Differences: The most recent TFR of the outgoing CEO was compared to the TFR of the incoming CEO at the time of their appointment. This analysis excludes acting or interim CEOs.
• Total Shareholder Return (TSR) Rank Differences: TSR is calculated over the six-month period prior to a new CEO’s appointment and a second six-month period after appointment. Both TSRs are then percentile ranked relative to the TSRs of all ASX 100 companies during the same timeframes.

Total Fixed Remuneration (TFR) Differences

The percent change in TFR between incoming CEOs and outgoing CEOs is in the table below. This analysis is based on a sample of 52 ASX 100 CEO transitions.

Table 1: New ASX 100 CEO to prior CEO TFR % difference (n=52)

The analysis reveals that on average, incoming CEOs receive 7.4% less fixed remuneration compared to their predecessors, with a significant decrease at the 25th percentile (-16.2%), and an equal fixed opportunity at the 75th percentile.

The statistics highlight how most new CEO appointments result in reduced fixed remuneration. In 2025, only 1 CEO appointment started with an increased TFR compared to their predecessor.

Relative Total Shareholder Return (TSR) Differences

The table below summarises the TSR percentile rank statistics for companies with a CEO change.

Table 2: New ASX 100 CEO TSR ranks within the ASX 100 (n=62)

Each of the TSRs prior to a change in CEO is lower than the expected value (e.g., expected value of 25^th percentile is 25.00). This means that CEOs are underperforming compared to peers over the same period. This trend is also observed in TSRs after a change in CEO, however the values are higher. A plausible explanation is that when a company performs poorly, CEOs resign and are replaced by successors tasked with improving performance.

The results may also be caused by limited sample sizes, however the persistence of the trend across years suggests some validity.

© Guerdon Associates 2026 Back to all articles