Dignity, (Almost) Always Dignity: The Tone of CEO Departure Press Releases

Abstract

This paper examines press releases that announce the departure of the firm’s CEO. Using the Loughran and McDonald (2011) dictionary, we find that the tone of the press release is almost always positive, with the number of positive words exceeding the number of negative words, even when the CEO is forced to leave the firm. For both types of words (positive and negative), fifteen of the twenty most frequently-used words in the press releases for voluntary departures are common to those for forced departures. Press releases for forced departures are less positive, however. The rare exceptions – press releases with more negative words than positive words – are more likely when the departure announcement coincides with an announcement involving the departing CEO’s involvement in a federal or internal investigation.