Jockeying for Position in CEO Letters: Impression Management and Sentiment Analytics

Financial Management, Forthcoming

Posted: 16 Sep 2013 Last revised: 31 Jan 2018

See all articles by Kris Boudt

Kris Boudt

Ghent University; Vrije Universiteit Brussel; Vrije Universiteit Amsterdam

James Thewissen

KU Leuven - Faculty of Business and Economics (FEB)

Date Written: November 20, 2016


This paper evidences the strategic positioning of positive and negative words within a CEO letter as a subtle form of impression management. We find that managers tend to present information in such an order that the reader of the CEO letter has a more positive perception of the underlying message. We uncover a smile in the frequency of positive words within the letter, and a half-smile in the intratextual distribution of negative words, with a prevalence of negative words at the beginning of the letter. We also find a significant positive association between this qualitative impression management and the use of abnormal accruals in earnings management. We propose sentiment analytics that can compensate for the strategic management of narrative structure and find that the proposed position weighted sentiment has more predictive power for the firm performance over the next year.

Keywords: CEO sentiment, Sentiment dynamics, Intratextual analysis, Firm profitability

JEL Classification: G14, G17, M40

Suggested Citation

Boudt, Kris and Thewissen, James, Jockeying for Position in CEO Letters: Impression Management and Sentiment Analytics (November 20, 2016). Financial Management, Forthcoming. Available at SSRN: or

Kris Boudt

Ghent University ( email )

Sint-Pietersplein 5
Gent, 9000

Vrije Universiteit Brussel ( email )

Pleinlaan 2
Brussels, 1050

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV

James Thewissen (Contact Author)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000

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