The recent financial crisis has led to unprecedented interest and debate about whether risk-taking incentives provided to bank CEOs played a role in the crisis. We add to this debate by examining
the relation between bank CEO turnover and performance, and whether this relation has been affected by banking deregulation. We argue that bank CEOs are more willing to engage in risky operations to exploit the growth opportunities arising from deregulation if they are less likely to be penalized for poor performance. Consistent with this expectation, we find that bank CEO turnover is significantly less sensitive to performance in the post-deregulation period. In addition, we find that the reduction in turnover-performance sensitivity primarily exists in large banks, which are best positioned to take advantage of growth opportunities, and in banks that adopt more aggressive business policies in response to deregulation. Furthermore, preliminary results indicate incentives deriving from bank CEO compensation and turnover policies are complementary.