According to a report by Jefferies, CEO changes usually do not lead to a turnaround in lagging growth of large IT firms. The report stated that mid-sized IT firms outperform on growth and profitability after a CEO change more often than large IT firms. The research shows that a CEO change led to outperformance on revenue growth on seven out of 13 occasions, on revenue and profit growth on five out of 13 occasions and on revenue, profit, and return on assets/equity on three occasions out of 13. The report added that among large IT companies, no company has seen outperformance across all three parameters relative to the industry. Despite a leadership change being beneficial, the report stated that turning around IT firms, especially larger companies, is challenging.
Mid-sized IT companies see more frequent outperformance following CEO change than large IT firms
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