Investor reactions to company disclosure of high CEO pay and high CEO-to-employee pay ratio: An experimental investigation
Journal of Management Accounting Research, ISSN: 1558-8033, Vol: 28, Issue: 1, Page: 107-125
2016
- 40Citations
- 1,242Usage
- 81Captures
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Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
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Metrics Details
- Citations40
- Citation Indexes40
- CrossRef40
- 33
- Academic Citation Index (ACI) - airiti2
- Usage1,242
- Downloads1,105
- 1,105
- Abstract Views137
- Captures81
- Readers81
- 81
Article Description
There is significant debate about the usefulness of disclosing the CEO-to-median employee pay ratio, as required under Section 953(b) of the Dodd-Frank Act in the United States. Using an experiment, we find that disclosing higher-than-industry CEO pay (versus comparable-to-industry CEO pay) marginally decreases perceived CEO pay fairness and perceived workplace climate, which is counteracted by a significant positive effect on perceived CEO attraction/retention ability, although there are no significant indirect effects through these perceptions on perceived investment potential. However, incrementally disclosing a higher-than-industry pay ratio (versus disclosing only higher- than-industry CEO pay) significantly decreases perceived CEO pay fairness and marginally deceases perceived workplace climate, and we find a significant indirect negative effect on perceived investment potential through perceived CEO pay fairness. If companies are concerned about negative public perceptions, then our results suggest that pay ratio disclosures may be better able than current CEO pay disclosures at shaming companies into restraining CEO pay.
Bibliographic Details
http://www.scopus.com/inward/record.url?partnerID=HzOxMe3b&scp=84969677538&origin=inward; http://dx.doi.org/10.2308/jmar-51392; https://publications.aaahq.org/jmar/article/28/1/107/554/Investor-Reactions-to-Company-Disclosure-of-High; https://ink.library.smu.edu.sg/soa_research/1523; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2550&context=soa_research; https://dx.doi.org/10.2308/jmar-51392; https://meridian.allenpress.com/jmar/article-abstract/28/1/107/182155/Investor-Reactions-to-Company-Disclosure-of-High?redirectedFrom=fulltext; http://aaajournals.org/doi/10.2308/jmar-51392; http://aaajournals.org/doi/abs/10.2308/jmar-51392; http://aaajournals.org/doi/10.2308/jmar-51392?code=aaan-site; https://aaajournals.org/doi/10.2308/jmar-51392; https://meridian.allenpress.com/jmar/article-pdf/28/1/107/1777992/jmar-51392.pdf
American Accounting Association
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