We investigate the consequences for non-promoted executives (NPEs) in CEO tournaments. We find that NPEs’ total incentives decrease following the end of a tournament based on evidence of their reduced future promotion prospects and limited adjustments to their compensation. Consistent with the theory that NPEs leave in response to this loss in incentives, results indicate that turnover is higher for NPEs who: 1) are ex ante more competitive for promotion, 2) compete in open tournaments without an heir apparent versus closed tournaments with an heir apparent winner, and 3) compete in tournaments with an outsider versus insider winner. Departed NPEs’ subsequent career outcomes suggest that the labor market assesses NPEs who leave after open tournaments more favorably than those who leave after closed tournaments and tournaments with an outsider winner. Overall, evidence suggests that promotion tournaments can weed out low-quality managers but also cause the unintended turnover of high-quality managers.

中文翻译：

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CEO 锦标赛的失败者：激励、离职和职业成果

我们调查了 CEO 锦标赛中非晋升高管 (NPE) 的后果。我们发现，NPE 的总激励在锦标赛结束后会减少，这是基于他们未来晋升前景减少和薪酬调整有限的证据。与 NPE 因激励损失而离开的理论相一致，结果表明 NPE 的营业额更高：1）事前在晋升方面更具竞争力，2）在没有明显继承人的公开锦标赛中竞争与在封闭锦标赛中竞争继承人明显的赢家，以及 3) 在比赛中与局外人对局内获胜者竞争。离职 NPE 的后续职业结果表明，劳动力市场对在公开锦标赛后离开的 NPE 的评估比在封闭锦标赛和与局外人获胜者锦标赛后离开的 NPE 更有利。总体而言，有证据表明，晋级锦标赛可以淘汰低素质经理，但也会导致高素质经理的意外离职。