The Impact of Corporate Reputation Ratings on CEO Compensation Under Diverse Economic Conditions

Joel Rudin; Jooh Lee

doi:10.1057/s41299-020-00095-0

The Impact of Corporate Reputation Ratings on CEO Compensation Under Diverse Economic Conditions

Joel Rudin, Jooh Lee

Management

Research output: Contribution to journal › Article › peer-review

Abstract

Although it is assumed that CEOs attempt to use corporate reputation ratings to justify increases in their annual compensation, controversy persists on the relationship between corporate reputation ratings and CEO compensation. Based on agency theory and signaling theory, we predict a positive relationship between corporate reputation ratings and CEO compensation but only during periods of economic recovery. Using a subset of Fortune’s “Most Admired” companies, this study demonstrates that corporate reputation ratings are significantly associated with CEO compensation during periods of economic recovery but not during periods of economic recession, after controlling the potential extraneous factors that may influence CEO pay.

Original language	English (US)
Pages (from-to)	117-127
Number of pages	11
Journal	Corporate Reputation Review
Volume	24
Issue number	3
DOIs	https://doi.org/10.1057/s41299-020-00095-0
State	Published - Aug 2021

All Science Journal Classification (ASJC) codes

Business and International Management
Strategy and Management

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10.1057/s41299-020-00095-0

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abstract = "Although it is assumed that CEOs attempt to use corporate reputation ratings to justify increases in their annual compensation, controversy persists on the relationship between corporate reputation ratings and CEO compensation. Based on agency theory and signaling theory, we predict a positive relationship between corporate reputation ratings and CEO compensation but only during periods of economic recovery. Using a subset of Fortune{\textquoteright}s “Most Admired” companies, this study demonstrates that corporate reputation ratings are significantly associated with CEO compensation during periods of economic recovery but not during periods of economic recession, after controlling the potential extraneous factors that may influence CEO pay.",

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The Impact of Corporate Reputation Ratings on CEO Compensation Under Diverse Economic Conditions

Abstract

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