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

Joel Rudin, Jooh Lee

    Research output: Contribution to journalArticlepeer-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 languageEnglish (US)
    Pages (from-to)117-127
    Number of pages11
    JournalCorporate Reputation Review
    Volume24
    Issue number3
    DOIs
    StateAccepted/In press - 2020

    All Science Journal Classification (ASJC) codes

    • Business and International Management
    • Strategy and Management

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