Smoke Signal or Smoke Screen? Why the Media Do Not Disapprove Equally or Overpaid CEOs

Jean-Philippe Vergne, Georg Wernicke, Steffen Brenner

    Research output: Contribution to conferencePaperResearchpeer-review

    Abstract

    This paper explains the amount of disapproval faced by firms that overpay their CEO by integrating signaling and categorization theories. We argue that, in contexts characterized by intense scrutiny, ambivalent signals sent by firms suspend categorization by stakeholders, leading to further disapproval, whereas ambiguous signals represent a form of category straddling that attenuates disapproval. We find empirical support for this proposition in the context of CEO overcompensation in the U.S. (1995-2007) after examining two organizational signals that affect perceptions of economic fairness (i.e. corporate philanthropy) and social fairness (i.e. employee diversity). Our integration of the signaling and categorization literatures adds to extant knowledge on firm’s social evaluations and recasts CEO compensation research within the literature on information intermediaries.
    Original languageEnglish
    Publication date2015
    Number of pages42
    Publication statusPublished - 2015
    EventThe 15th European Academy of Management Conference (EURAM) 2015: Uncertainty is a Great Opportunity - Warsaw, Poland
    Duration: 17 Jun 201520 Jun 2015
    Conference number: 15
    http://euramonline.org/euram-15.html

    Conference

    ConferenceThe 15th European Academy of Management Conference (EURAM) 2015
    Number15
    Country/TerritoryPoland
    CityWarsaw
    Period17/06/201520/06/2015
    Internet address

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