When is good news bad and vice versa? The Fortune rankings of America's most admired companies

Yingmei Cheng, Baixiao Liu, John J. McConnell and Aaron Rosenblum

Journal of Corporate Finance, 2017, vol. 43, issue C, 378-396

Abstract: We use increases and decreases in the ranking scores of Fortune's Most Admired Companies to test the proposition that media shocks can increase (decrease) the value of a manager's reputational capital and, thus, enhance (diminish) his power to extract corporate resources for private benefit at the expense of shareholders. Consistent with the proposition increases (decreases) in scores are associated with stock price decreases (increases). And, CEOs whose firms experience increases (reductions) in scores experience increases (reductions) in compensation and in job tenure, and their firms undertake more (fewer) acquisitions and the acquisitions are less (more) value increasing.

Keywords: Corporate media ranking; Corporate value; CEO compensation; CEO turnover; Acquisitions (search for similar items in EconPapers)
JEL-codes: G31 G32 G34 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:43:y:2017:i:c:p:378-396

DOI: 10.1016/j.jcorpfin.2017.02.008

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