Torsten Wulf, Stephan Stubner, Jutta Miksche, Kati Roleder

• In extending leader life cycle theory (Hambrick & Fukutomi, 1991) we examine the relationship between CEO tenure and company performance. We show that a uniform leader life cycle as proposed by previous research does not exist. Rather, based on arguments from institutional theory and circulation of power theory we point to the relevance of power dynamics for the relationship between CEO tenure and performance. We show that distinct leader life cycles result for CEOs with long tenure and CEOs with short tenure. Specifically, for long-tenured CEOs we find a slow increase in performance during the early tenure which then increases strongly and later declines again, whereas the life cycle of short-tenured CEOs is characterized by strong performance increases during the early tenure followed by a sharp decline. Moreover we find evidence that a longer CEO tenure leads to higher overall firm performance.