We study a model of “information-based entrenchment” in which the CEO has private information that the board needs to make an efficient replacement decision. Eliciting the CEO’s private information is costly, as it implies that the board must pay the CEO both higher severance pay and higher on-the-job pay. While higher CEO pay is associated with higher turnover in our model, there is too little turnover in equilibrium. Our model makes novel empirical predictions relating CEO turnover, severance pay, and on-the-job pay to firm-level attributes such as size, corporate governance, and the quality of the firm’s accounting system. ∗We thank Andres Almazan, James Dow, Dirk Jenter, Wei Jiang, Lasse Pedersen, Thomas Phillipon, Javier Suarez, Jeff Wurgler, David Yermack, and seminar participants at Stanford, Berkeley, Wharton, NYU, USC, LBS, LSE, CEMFI, HEC, the European Summer Symposium in Financial Markets in Gerzensee, and the NBER Corporate Finance Meeting in Cambridge for helpful comments and suggestions. This is a substantially revised version of an earlier draft entitled “Keeping the Board in the Dark: CEO Compensation and Entrenchment.” †University of Frankfurt, LSE, CEPR, and ECGI. E-mail: firstname.lastname@example.org. ‡New York University, CEPR, and ECGI. Email: email@example.com.