Although newly appointed CEOs are commonly viewed as the oracles of innovation, whether, how, and when CEO successions shape their firm’s post-succession innovation trajectory remains theoretically vague and empirically equivocal. We advance an exploitation-exploration framework to reconcile divergent insights and elaborate understanding. Because exploitative and exploratory innovations rely upon distinct managerial skills, knowledge, and cognitions, we argue that outsider and insider CEOs shape post-succession innovation in countervailing ways. Outsiders are more apt to embrace exploratory innovations than insiders, who are constrained by existing strategic commitments, established paradigms, and social embeddedness. At the same time, outsiders may be less capable than insiders to cultivate exploitative innovations because of unfamiliarity with the firm’s resources. We then elaborate these effects within an agency boundary of post-succession stock option compensation. We argue that while new outsider CEOs’ predilection to exploit and explore is relatively intransient to the proportion of stock option compensation in early years of tenure, option compensation can shift new insider CEOs’ attention from exploitative to exploratory innovations. From a longitudinal dataset of 495 US firms, we find the differential effects of outsider and insider CEOs on post-succession innovation trajectory, as well as the role of option compensation in bounding these effects.