Does CEO (over)compensation influence corporate reputation?

22. Oktober 2018

Ein neuer Forschungsbeitrag von Ann-Christine Schulz (Competence Center for Strategy & Competitiveness, FHWien der WKW), der in Zusammenarbeit mit Miriam Flickinger (Universität Aarhus) entstanden ist, wurde beim Review of Managerial Science angenommen.

Der Artikel, der Reputationseffekte von übermäßigen Managergehältern, diskutiert und untersucht ist bereits online verfügbar und wird voraussichtlich 2019: publiziert


This paper investigates the impact of CEO excess compensation on corporate reputation. Past research has focused mainly on understanding how CEO overpayment is related to firm performance. As a consequence, we know relatively little about the implications of paying excess compensation for other important firm outcomes such as corporate reputation. By analyzing a sample of S&P 100 firms over the period 1995–2010, we show that overpayment in total compensation has a weak positive effect on a firm’s reputation while overpayment in stock options has a significant and negative impact on corporate reputation. Moreover, we find that the negative impact of CEO excess compensation in stock options is augmented if there has been a CEO change during the previous year, whereas this effect is lessened by CEO tenure. These results demonstrate that the relationship between excessive CEO compensation and corporate reputation is complex. It is influenced by the type of compensation and by specific CEO characteristics that invite greater public attention and scrutiny.