09-15-2026
Employee sentiment is often treated as a measure of workplace morale. New research from the Daniels School’s Hojun Seo, Jaewoo Kim of the University of Oregon and Yucheng (John) Yang of The Chinese University of Hong Kong suggests it may be something more consequential: an early warning signal for CEO turnover, employee departures and declining firm value.
In “Should I Stay or Leave? Employee Disapproval and Quiet CEO Departure,” the researchers examine whether CEOs respond to employee disapproval by leaving before they can be dismissed — and whether doing so helps protect their careers. Using employee CEO ratings from Glassdoor and a sample of 10,669 firm-year observations from 2008 to 2019, they find that higher employee disapproval is associated with a greater likelihood of a CEO’s quiet departure, defined as a retirement or move to a new opportunity that is not publicly disclosed as a dismissal.
The relationship is not simply a reflection of poorly performing companies. In fact, the association between employee disapproval and quiet CEO departure is stronger among firms with better performance. The researchers suggest this is consistent with high-performing CEOs having stronger outside opportunities and therefore greater ability to leave when they recognize a mismatch with their workforce. The relationship is also stronger in organizations that rely heavily on human and organizational capital.
Why does employee disapproval matter so much? The research points to a chain reaction. When employees are dissatisfied with a CEO’s leadership, vision or strategy, they may become less committed to executing the organization’s strategy. They may also leave. The study finds that employee disapproval is followed by higher employee turnover, lower firm value and greater future dismissal risk for CEOs who remain.
That makes employee sentiment more than a human resources concern. It can be a leading strategic indicator.
For executives, the first lesson is to pay attention to workforce alignment before dissatisfaction becomes visible through turnover or deteriorating performance. Employee surveys, listening sessions, manager feedback and other channels can help leaders identify whether concerns reflect isolated dissatisfaction or a deeper disconnect over leadership, strategy, culture or organizational values. The researchers emphasize that CEO-employee match quality is distinct from overall CEO quality: a CEO who is poorly matched with employees in one organization may be highly effective in another.
For boards, the findings suggest that workforce sentiment deserves a place in succession planning and CEO evaluations. Employee disapproval can signal rising organizational friction before the consequences fully appear in financial results. Boards should therefore ask not only whether a CEO is delivering results today, but also whether employees remain willing and able to execute the strategy.
The findings also have implications for executive compensation. Large amounts of unvested equity reduce a CEO’s willingness to leave when employee disapproval is high, potentially prolonging a dysfunctional leadership relationship. Compensation committees should consider whether retention incentives are unintentionally encouraging executives to remain in situations where organizational alignment has substantially deteriorated.
Finally, the research highlights the importance of how leadership transitions are managed. CEOs who quietly depart amid employee disapproval are more likely to secure subsequent employment than CEOs who remain and are later dismissed. Some move into CEO, president or board roles, suggesting that a quiet departure can preserve labor-market reputation even when the CEO-firm relationship has broken down.
The broader message for leaders is straightforward: employee sentiment is not merely an indicator of workplace satisfaction; it can provide an early signal of strategic and governance risk. Organizations that systematically listen to employees, recognize leadership misalignment and respond before dysfunction becomes costly may be better positioned to protect both organizational value and leadership effectiveness.
