Employee Responses to CEO Activism

We examine employee responses to CEO activism, the increasingly common practice of CEOs taking public stances on socio-political issues. CEO activism may bolster employees’ identification with their organizations and strengthen shared beliefs among employees. Alternatively, CEO activism may alienate employees if CEO stances contrast with employees’ ideologies. We find that employee satisfaction is higher when CEOs engage in activism on topics related to diversity and pay equality. Furthermore, firms with CEO activism experience a net inflow of more productive inventors, indicating improved labor market reputation. These employee responses constitute an important channel that connects CEO activism to increased firm value