> It feels very reasonable to worry yet it is not totally impossible a person may happen to want to quit for no business-relevant reason. Indeed, but that does

> It feels very reasonable to worry yet it is not totally impossible a person may happen to want to quit for no business-relevant reason. Indeed, but that does not change the fact that the practical matter of transitioning leadership means there is certain to be some dysfunction. Not to mention that some CEOs end up running their business into the ground and it's not always obvious which ones will succeed and which won't. The uncertainty also drives the stock price down. There is no way to fix this (IMO), and this incentivizes the shareholders (in the form of the board) to offer whatever compensation necessary to prevent this kind of unnecessary leadership change, leading to the CEO salaries that some label as exorbitant. > Makes sense but can't the new leader be and seem much better so the prices could actually rise? Yes, but people are invested in the market for all sorts of reasons. Someone with a shorter term horizon (like someone retiring imminently) is likely to have their money invested in larger companies, because it is expected that larger companies have fewer management shifts and thus fewer price fluctuations. Thus, while certainly a change in leadership can result in long term value increase, it has the effect of lowering the current value, and this can disproportionately affect some people. Of course, for those with a longer time horizon, this is an opportunity for arbitrage.