TY - JOUR
T1 - CEO power and firm opacity
AU - Koo, Kwang Joo (KJ)
AU - Kim, Jonghwan (Simon)
N1 - Publisher Copyright:
© 2018, © 2018 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2019/6/7
Y1 - 2019/6/7
N2 - This paper examines the association between CEO power and firm opacity. We discuss the entrenchment and managerial power theories to develop a coherent hypothesis that captures a negative relationship. To investigate the relationship, we use CEO pay slice (CPS) and opacity index as proxies for CEO power and information environment, respectively. With alternate model specifications, we consistently find that firm opacity is positively associated with CPS. With the findings, we conclude that powerful CEOs pursue greater firm opacity–leading to poorer information environments–to hide, if any, agency issues or poor firm performance.
AB - This paper examines the association between CEO power and firm opacity. We discuss the entrenchment and managerial power theories to develop a coherent hypothesis that captures a negative relationship. To investigate the relationship, we use CEO pay slice (CPS) and opacity index as proxies for CEO power and information environment, respectively. With alternate model specifications, we consistently find that firm opacity is positively associated with CPS. With the findings, we conclude that powerful CEOs pursue greater firm opacity–leading to poorer information environments–to hide, if any, agency issues or poor firm performance.
KW - CEO power
KW - Executive Compensation
KW - opacity
KW - pay disparity
KW - transparency
UR - http://www.scopus.com/inward/record.url?scp=85049921516&partnerID=8YFLogxK
U2 - 10.1080/13504851.2018.1497841
DO - 10.1080/13504851.2018.1497841
M3 - Article
AN - SCOPUS:85049921516
SN - 1350-4851
VL - 26
SP - 791
EP - 794
JO - Applied Economics Letters
JF - Applied Economics Letters
IS - 10
ER -