CEO Visibility: Are Media Stars Born or Made?

• In Event: Media and Information Intermediaries

Abstract

Recent literature finds that a CEO’s media visibility is positively associated with job acquisition and pay premiums. However, the literature has been quiet about whether media coverage is naturally bestowed upon CEOs, or whether CEOs are able to influence media coverage. That is, are CEO media stars born or made? We develop a measure of “CEO promotion” in firm disclosures based on whether the CEO is named or quoted in firm-initiated press releases, as well as on the clarity and vividness of the CEO’s quotes. Our measure of CEO promotion is positively associated with the importance of news releases, asymmetrically associated with good news more than bad news, and negatively associated with CEO tenure, which is consistent with CEO promotion being an intentional act based on cost/benefit analysis. Turning to the external media, we find evidence consistent with CEO promotion driving up to a four-fold increase in media coverage of the CEO, indicating that CEO promotion has an economically meaningful impact on CEO media coverage. Additional analysis indicates that CEO promotion positively impacts the CEO’s probability of receiving a media award. Finally, results show that “promoted” media coverage is positively associated with CEO compensation, but to a lesser degree than “organic” media coverage that would likely have occurred without the promotion activities.

Authors

• Elizabeth Blankespoor, Stanford University

• Ed deHaan, Stanford University