Abstract

http://ssrn.com/abstract=2131476
 
 

Citations (2)



 


 



Using Shareholder Letters to Measure CEO Integrity


Shane S. Dikolli


Duke University - Fuqua School of Business

Thomas Keusch


Erasmus University Rotterdam (EUR)

William J. Mayew


Duke University - Fuqua School of Business

Thomas D. Steffen


Duke University - Fuqua School of Business

July 17, 2014


Abstract:     
We forward and validate a linguistically derived measure of CEO integrity. We contend low-integrity CEOs use a dilution strategy when communicating, which manifests empirically as relatively excessive explanations in the annual shareholder letter. Using the extent of shareholder letter causation words to measure variation in explanations, we find low-integrity CEOs receive lower integrity ratings from subordinates, are perceived unfavorably by employees generally, more likely receive a “tone at the top” material weakness and a higher fee from their auditor, more likely receive backdated options, face a higher lawsuit likelihood and, prior to Sarbanes-Oxley, provide lower quality accruals.

Number of Pages in PDF File: 59

Keywords: Integrity, Performance evaluation, Behavioral traits, Linguistic textual analysis

JEL Classification: M40, J10

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Date posted: August 18, 2012 ; Last revised: August 27, 2014

Suggested Citation

Dikolli, Shane S. and Keusch, Thomas and Mayew, William J. and Steffen, Thomas D., Using Shareholder Letters to Measure CEO Integrity (July 17, 2014). Available at SSRN: http://ssrn.com/abstract=2131476 or http://dx.doi.org/10.2139/ssrn.2131476

Contact Information

Shane Sami Dikolli (Contact Author)
Duke University - Fuqua School of Business ( email )
100 Fuqua Drive
Box 90120
Durham, NC 27708-0120
United States
919-660-1949 (Phone)
919-869-1901 (Fax)
Thomas Keusch
Erasmus University Rotterdam (EUR) ( email )
Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands
+31 10 4081326 (Phone)
William J. Mayew
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
919-660-7781 (Phone)
919-660-7971 (Fax)
HOME PAGE: http://www.fuqua.duke.edu/faculty/alpha/mayew.htm
Thomas D. Steffen
Duke University - Fuqua School of Business ( email )
100 Fuqua Drive
Box 90120
Durham, NC 27708-0120
United States
919-660-7628 (Phone)
HOME PAGE: http://www.duke.edu/~tds24/
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