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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Published in | Economics letters Vol. 117; no. 1; pp. 337 - 339 |
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Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
Amsterdam
Elsevier B.V
01.10.2012
Elsevier Science Ltd |
Subjects | |
Online Access | Get full text |
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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. |
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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 |