Date of this Version
Journal of Financial Economics
We 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.
© 2008. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
press, media, executive compensation, corporate governance
Core, J. E., Guay, W. R., & Larcker, D. F. (2008). The Power of the Pen and Executive Compensation. Journal of Financial Economics, 88 (1), 1-25. http://dx.doi.org/10.1016/j.jfineco.2007.05.001
Date Posted: 27 November 2017
This document has been peer reviewed.