Corporate visibility and executive pay

This paper seeks evidence of implicit regulation of executive pay. The implicit regulation hypothesis suggests highly visible companies will constrain their behavior to avoid potential reprisals from constituents, politicians and potential regulators. We extend this literature using a measure of cor...

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Bibliographic Details
Published inEconomics letters Vol. 117; no. 1; pp. 337 - 339
Main Authors Rayton, Bruce A., Brammer, Stephen, Cheng, Suwina
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.10.2012
Elsevier Science Ltd
Subjects
Corporate culture
Evidence
Executive compensation
Implicit regulation
Incentive pay
Literature
Organizational behavior
Regulation
Studies
Visibility
Working papers
J3
Visibility
G3
Incentive pay
Implicit regulation
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Summary:This paper seeks evidence of implicit regulation of executive pay. The implicit regulation hypothesis suggests highly visible companies will constrain their behavior to avoid potential reprisals from constituents, politicians and potential regulators. We extend this literature using a measure of corporate visibility based on the number of news stories about each firm in a balanced panel of 242 public companies. ► The link between top executive pay and performance is weaker in companies that are the subject of more media scrutiny. ► This effect persists when controlling for firm size and equity risk. ► There is a residual effect of firm size on the link between top executive pay and performance.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2012.05.044