We explore how insider trading returns, disparities in executive pay, and CEO turnover are interrelated. Our findings reveal both independent and interactive effects for insider trading returns, the CEO pay gap, and the likelihood of CEO turnover. First, an increase in abnormal returns from insider purchases lowers the probability of a CEO’s turnover, while an increase in abnormal returns from insider sales increases the likelihood of a CEO’s dismissal. Second, the CEO pay gap negatively affects the probability of CEO turnover for insider purchases, but it does not have a similar effect on insider sales. Third, the interaction between insider abnormal returns and any CEO pay disparity influences the impact of these returns on CEO turnover. Specifically, this interaction diminishes the positive effect of insider selling on the probability of a CEO’s dismissal, offsets the negative effect of insider purchasing on CEO dismissal, and, finally, amplifies the negative impact of CEO pay disparity on the probability of a CEO’s dismissal during periods witnessing insider purchases.

This paper examines the predictive value of fast-and-frugal trees modelling embeding thefive factors suggested by model. We examine a fast-andfrugaltrees predictive model of returns upon stock traded on the S&P500 over the years2010 to 2024. We allow for three variations in the predictive context of the fast-and-frugaltrees used: Skewness in the coefficients of the Fama-French models OLS regressionestimates Analysts following the chosen firm/industry sector. Market value of the firm or sector examined.We find the FFT model is a worthy competitor to regression models in predictingstock returns for the S&P 500 in our sample period, especially in terms of theconsistent nature of the predictions across sectoral groups. But a logisticregression alternative outperforms both OLS and our fast-and-frugal-tree inpredicting S&P 500 returns in our sample period.