The power of the pen and executive compensation
AbstractWe examine the press' role in monitoring and influencing executive compensation practice using more than 11,000 press articles about CEO compensation from 1994 to 2002. Negative press coverage is more strongly related to excess annual pay than to raw annual pay, suggesting a sophisticated approach by the media in selecting CEOs to cover. However, negative coverage is also greater for CEOs with more option exercises, suggesting the press engages in some degree of "sensationalism." We find little evidence that firms respond to negative press coverage by decreasing excess CEO compensation or increasing CEO turnover.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Economics.
Volume (Year): 88 (2008)
Issue (Month): 1 (April)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505576
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dial, Jay & Murphy, Kevin J., 1995. "Incentives, downsizing, and value creation at General Dynamics," Journal of Financial Economics, Elsevier, vol. 37(3), pages 261-314, March.
- Papke, Leslie E & Wooldridge, Jeffrey M, 1996.
"Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 11(6), pages 619-32, Nov.-Dec..
- Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.
- Hall, Brian J. & Murphy, Kevin J., 2002.
"Stock options for undiversified executives,"
Journal of Accounting and Economics,
Elsevier, vol. 33(1), pages 3-42, February.
- Luigi Zingales, 2000.
"In Search of New Foundations,"
CRSP working papers
515, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Heron, Randall A. & Lie, Erik, 2007. "Does backdating explain the stock price pattern around executive stock option grants?," Journal of Financial Economics, Elsevier, vol. 83(2), pages 271-295, February.
- Bengt Holmstrom & Steven N. Kaplan, 2003.
"The State of U.S. Corporate Governance: What's Right and What's Wrong?,"
NBER Working Papers
9613, National Bureau of Economic Research, Inc.
- Bengt Holmstrom & Steven N. Kaplan, 2003. "The State Of U.S. Corporate Governance: What'S Right And What'S Wrong?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 15(3), pages 8-20.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Gregory S. Miller, 2006. "The Press as a Watchdog for Accounting Fraud," Journal of Accounting Research, Wiley Blackwell, vol. 44(5), pages 1001-1033, December.
- Alexander Dyck & Luigi Zingales, 2002.
"The Corporate Governance Role of the Media,"
NBER Working Papers
9309, National Bureau of Economic Research, Inc.
- Alexander Dyck & Luigi Zingales, 2002.
"Private Benefits of Control: An International Comparison,"
NBER Working Papers
8711, National Bureau of Economic Research, Inc.
- Alexander Dyck & Luigi Zingales, 2004. "Private Benefits of Control: An International Comparison," Journal of Finance, American Finance Association, vol. 59(2), pages 537-600, 04.
- Dyck, Alexander & Zingales, Luigi, 2002. "Private Benefits of Control: An International Comparison," CEPR Discussion Papers 3177, C.E.P.R. Discussion Papers.
- Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563 Elsevier.
- Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-25, June.
- Dechow, Patricia M. & Myers, Linda A. & Shakespeare, Catherine, 2010. "Fair value accounting and gains from asset securitizations: A convenient earnings management tool with compensation side-benefits," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 2-25, February.
- Frydman, Carola & Molloy, Raven S., 2011.
"Does tax policy affect executive compensation? Evidence from postwar tax reforms,"
Journal of Public Economics,
Elsevier, vol. 95(11), pages 1425-1437.
- Carola Frydman & Raven S. Molloy, 2009. "Does tax policy affect executive compensation? evidence from postwar tax reforms," Finance and Economics Discussion Series 2009-30, Board of Governors of the Federal Reserve System (U.S.).
- Carola Frydman & Raven S. Molloy, 2011. "Does Tax Policy Affect Executive Compensation? Evidence from Postwar Tax Reforms," NBER Working Papers 16812, National Bureau of Economic Research, Inc.
- Armstrong, Christopher S. & Gow, Ian D. & Larcker, David F., 2012. "The Efficacy of Shareholder Voting: Evidence from Equity Compensation Plans," Research Papers 2097, Stanford University, Graduate School of Business.
- Karen Moris, 2010. "La presse en tant que mécanisme de gouvernance disciplinaire - Press as a disciplinary governance mechanism," Working Papers FARGO 1101003, Université de Bourgogne - Crego EA 7317/Fargo (Research center in Finance,organizational ARchitecture and GOvernance).
- Larcker, David F. & Ormazabal, Gaizka & Taylor, Daniel J., 2011. "The market reaction to corporate governance regulation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 431-448, August.
- Andrew Carrothers & Seungjin Han & Jiaping Qiu, 2012. "CEO Pay with Perks," Department of Economics Working Papers 2012-05, McMaster University.
- Houston, Joel F. & Lin, Chen & Ma, Yue, 2011. "Media ownership, concentration and corruption in bank lending," Journal of Financial Economics, Elsevier, vol. 100(2), pages 326-350, May.
- Kuhnen, Camelia M. & Niessen, Alexandra, 2010.
"Public opinion and executive compensation,"
CFR Working Papers
08-09 [rev.], University of Cologne, Centre for Financial Research (CFR).
- Hsu, Audrey Wen-hsin & Wang, Tawei, 2013. "Does the market value corporate response to climate change?," Omega, Elsevier, vol. 41(2), pages 195-206.
- Mohamed Khenissi & Peter Wirtz, 2013. "Processus Decisionnel En Matiere De Remuneration Des Dirigeants : Le Cas Vinci," Working Papers halshs-00850083, HAL.
- Karen Moris, 2011. "La presse en tant que mécanisme de gouvernance disciplinaire," Revue Finance Contrôle Stratégie, revues.org, vol. 14(4), pages 21-66, December.
- Chen, Chia-Wei & Yi, Bingsheng & Lin, J. Barry, 2013. "Media coverage, board structure and CEO compensation: Evidence from Taiwan," Journal of Multinational Financial Management, Elsevier, vol. 23(5), pages 434-445.
- Pryshchepa, Oksana & Aretz, Kevin & Banerjee, Shantanu, 2013. "Can investors restrict managerial behavior in distressed firms?," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 222-239.
- Larcker, David F. & McCall, Allan L. & Ormazabal, Gaizka, 2012. "The Economic Consequences of Proxy Advisor Say-on-Pay Voting Policies," Research Papers 2105, Stanford University, Graduate School of Business.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.