Personality Similarity, Demographic Similarity, and Heir Apparent Promotion.

In a relay CEO succession, the heir apparent may exit from the firm when the incumbent CEO are reluctant to relinquish power as initially planned, causing crisis to the firm. This study examines how the personal attributes of the heir and the incumbent can jointly influence the outcome of a relay CEO succession. Specifically, we propose that heir extraversion increases the likelihood of heir promotion by influencing the way an heir is liked and evaluated, especially when the incumbent is also high in extraversion, which can trigger similarity-based interpersonal attraction, thus magnifying the effect of heir extraversion. We further suggest that such a similarity in extraversion plays a more salient role when the incumbent and the heir are demographically different, indicating that personality similarity can to some degree compensate for the lack of demographic similarity in generating mutual like. Our empirical results based on 363 incumbent-heir dyads from publicly listed S&P 1500 companies between 2002 and 2015 provide support for the theoretical arguments. [ABSTRACT FROM AUTHOR]