Publication Type

Conference Paper

Version

submittedVersion

Publication Date

6-2019

Abstract

Regulators have increased the disclosure requirements of top executives as part of corporate governance reform. This study examines how trust arising from a firm’s corporate reputation will interact with top executive compensation disclosure to influence investor judgments. This study used a 2 X 2 between subjects experimental design, with corporate reputation (good versus bad) and pay ratio (high versus low) as independent variables to test the hypotheses. The key findings show that if the firm with a good corporate reputation discloses a high pay ratio, participants punished the good reputation firm more than the bad reputation firm, demonstrating a negative violation of expectations. On the other hand, if the firm with a bad corporate reputation discloses a low pay ratio, participants rewarded the bad reputation firm more than the good reputation firm, demonstrating a positive violation of expectations. The results of this study may be limited by its particular circumstances of corporate reputation and compensation disclosure, making generalizations of the findings to other settings difficult.

Keywords

corporate reputation, executive compensation disclosure, investor judgments

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

American Accounting Association Annual Meeting 2019, August 9-14, San Franciso; Canadian Academic Accounting Association Annual Conference 2019, May 30 - June 1

First Page

1

Last Page

34

City or Country

Ottawa, Canada

Copyright Owner and License

Authors

Additional URL

https://ssrn.com/abstract=3311443

Download

Share

COinS