OSA Seminar by Miriam N. Flickinger

Does CEO (over)compensation influence corporate reputation?

2017.08.30 | Merete Elmann

Date Mon 18 Sep
Time 12:00 15:25
Location Room 2628-M104, Department of Management, Aarhus BSS, Aarhus University


Monday, 18 September 2017 at 12:00 in room 2628-M104, Miriam N. Flickinger from the Department of Management will give a presentation entitled:

Does CEO (over)compensation influence corporate reputation?


Everyone is welcome!

 

This paper investigates the impact of CEO (over)compensation on corporate reputation. Although prior research has analyzed how CEO overpayment may affect firm outcomes, especially firm performance, results have been inconclusive. Therefore, we know relatively little about the consequences that paying excess compensation to CEOs can have for firms. Using a sample of S&P 100 firms, we find that relative overpayment in total compensation has a weak positive effect on a firm’s reputation while overpayment in stock options has a negative impact on corporate reputation. Moreover, our results show that the negative impact of stock option overpayment is augmented if the CEO changed in the prior year while the relationship is lessened by CEO age. These findings elucidate that the relationship between excessive compensation is complex and depends on the type of compensation, especially when CEO characteristics make them more prone to higher public attention and scrutiny.

 

 

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