Public opinion and executive compensation

We inquire whether public opinion influences executive compensation. During 1992-2008 the negativity of press coverage of CEO pay varied significantly, with stock options being the most discussed pay component. We find that after more negative press coverage of CEO pay firms reduce option grants and increase other compensation including stock awards, overall reducing pay-to-performance sensitivity. The reduction in option pay after increased press negativity is more pronounced when firms and CEOs have stronger reputation concerns. Our within-firm, within-year identification shows the results cannot be explained by annual changes in accounting rules regarding executive compensation, stock market conditions, or pay mean-reversion. -- executive compensation ; public opinion ; social norms ; media coverage

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Year of publication:	2010 ; This version: May 2010
Other Persons:	Kuhnen, Camelia M. (contributor) ; Niessen-Ruenzi, Alexandra (contributor)
Publisher:	Cologne : Centre for Financial Research
Subject:	Managervergütung \| Executive compensation \| Vergütungssystem \| Compensation system \| Soziale Norm \| Social norm \| Öffentliche Meinung \| Public opinion \| Wirkungsanalyse \| Impact assessment \| USA \| United States \| 1990-2006

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Extent:	Online-Ressource (PDF-Datei: 52 S., 567,24 KB)
Series:	Working paper / Centre for Financial Research. - Köln : CFR, ZDB-ID 2458327-3. - Vol. 08-09
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Zsfassung in dt. Sprache Systemvoraussetzungen: Acrobat reader
Other identifiers:	hdl:10419/69237 [Handle]
Classification:	G34 - Mergers; Acquisitions; Restructuring; Corporate Governance ; M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs) ; J33 - Compensation Packages; Payment Methods
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10009698174