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Media Disapproval: Signals of greed, goodness, and CEO Compensation

  • Apr 3, 2019
Media Disapproval: Signals of greed, goodness, and CEO Compensation

J.P Vergne and his colleagues use panel data covering 2,240 CEOs, at 1,477 U.S. publicly listed firms, as well as interviews with eight leading journalists who cover CEO pay, to examine how media evaluations of CEO overcompensation (a negative cue associated with selfishness and greed) are affected by the presence of corporate philanthropy (a positive cue associated with altruism and generosity). They find that firms engaged in philanthropy receive more media disapproval when they overcompensate their CEO, but they are also more likely to decrease CEO overcompensation as a response.

JP Vergne, Georg Wernicke, Steffen Brenner (2018) Signal Incongruence and Its Consequences: A Study of Media Disapproval and CEO Overcompensation. Organization Science 29(5):796-817