Abstract

http://ssrn.com/abstract=1014447
 
 

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The Power of the Pen and Executive Compensation


John E. Core


Massachusetts Institute of Technology (MIT) - Sloan School of Management

Wayne R. Guay


University of Pennsylvania - Accounting Department

David F. Larcker


Stanford University - Graduate School of Business


Journal of Financial Economics Vol. 88, No. 1 (April, 2008), pp. 1-25

Abstract:     
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.

Keywords: press, media, executive compensation, corporate governance

JEL Classification: G32, G34, J33, M41

Accepted Paper Series


Not Available For Download

Date posted: September 17, 2007  

Suggested Citation

Core, John E. and Guay, Wayne R. and Larcker, David F., The Power of the Pen and Executive Compensation. Journal of Financial Economics Vol. 88, No. 1 (April, 2008), pp. 1-25. Available at SSRN: http://ssrn.com/abstract=1014447

Contact Information

John E. Core
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
77 Massachusetts Ave.
E62-416
Cambridge, MA 02138
United States
Wayne R. Guay (Contact Author)
University of Pennsylvania - Accounting Department ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-7775 (Phone)
215-573-2054 (Fax)

David F. Larcker
Stanford University - Graduate School of Business ( email )
Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

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