# Personal Costs of Executive Turnovers Forced CEO turnovers lead to a 40% drop in personal income. - **Source:** [Journal of Finance](https://onlinelibrary.wiley.com/journal/15406261) - **Published:** 2026-08-08 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/a8c63cdf-d229-4673-85b5-0674511da4e1 ## Impact of CEO Turnovers According to official records from the Danish Tax Authority, forced CEO turnovers result in significant declines in personal income. Over a five-year period, incomes drop by an average of 40%. This decline is primarily driven by labor market outcomes. While salaries and entrepreneurial incomes decrease, other sources of income see an increase. ## Role of Performance Income declines are more pronounced for CEOs with poor performance during their tenures. This finding supports the idea that the executive labor market is the main channel for income loss. CEOs with low performance are less favored in the labor market, which negatively impacts their income. ## Changes in Income Sources Following forced CEO turnovers, CEOs' income sources undergo significant changes. While salaries and entrepreneurial incomes decrease, investment incomes and other passive incomes increase. This reflects CEOs' efforts to diversify their income. However, these efforts do not fully compensate for the loss in salary. ## Effects on the Labor Market Forced CEO turnovers cause significant fluctuations in the labor market. CEOs face longer job search periods and are forced to accept lower-paying positions. This is particularly evident for CEOs with poor performance. These negative effects in the labor market further exacerbate income loss. ## The Danish Example CEO turnovers in Denmark provide an important case study for understanding the personal costs of forced turnovers. Detailed income data from the Danish Tax Authority clearly show the declines in CEOs' incomes. These data offer valuable insights into the long-term effects of forced turnovers. ## Decline in Entrepreneurial Income Following forced CEO turnovers, CEOs' entrepreneurial incomes see significant declines. This indicates that CEOs are less successful in starting new businesses or expanding existing ones. The decline in entrepreneurial income is a major factor negatively affecting CEOs' overall income. ## Executive Labor Market The executive labor market plays a critical role in understanding the effects of forced CEO turnovers. This market directly influences CEOs' job search processes and salaries. CEOs with low performance are less favored in this market, increasing income loss. The dynamics of the executive labor market are a key factor determining CEOs' personal costs. ## Findings and Importance This study clearly highlights the personal costs of forced CEO turnovers. The 40% drop in CEOs' incomes demonstrates the long-term effects of these turnovers. CEOs with poor performance are more affected by this process. These findings provide important contributions to understanding the dynamics of the executive labor market. ## Sources covering this story - https://onlinelibrary.wiley.com/doi/10.1111/jofi.70064?af=R — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._