Investors may want to give rookie CEOs a wide berth

Avoid stocks with rookie CEOs?

Fresh blood can inject life into a company, but the first year can be rocky under a new CEO

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A new job can be overwhelming—most new employees feel lucky if they have their voice-mail working by the end of the week. Now, imagine what it must be like for a rookie CEO. Change can be good, but if you’re an investor you may want to give new CEOs a wide berth during their transition. We examined the 12 biggest names in the Canadian financial sector and found new CEOs often lagged their peers in their first year. In contrast, the outgoing CEOs from these same firms were more likely to outperform their sector in their final year.

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