Does Stakeholder Outrage Determine Executive Pay?

Attila Balogh, Danika Wright and Jason Zein

The Review of Corporate Finance Studies, 2026, vol. 15, issue 1, 227-268

Abstract: An unprecedented number of firms announced CEO salary reductions at the onset of the coronavirus pandemic. We document that the total compensation for these CEOs did not actually decrease but was instead restructured, leading to a marked increase in opaque components of compensation. These adjustments align with the managerial power view of executive pay setting, whereby heightened stakeholder outrage prompts greater camouflaging of compensation to avoid scrutiny. We further show that this pattern of compensation adjustments predominantly occurred in firms with powerful CEOs, weak institutional investor monitoring, and poorer governance quality.

Keywords: JEL; G34 (search for similar items in EconPapers)
Date: 2026
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