Enhancing firm performance through intra-group managerial experience: Evidence from group-affiliated firms in Korea

Asia Pacific Journal of Management - Although business groups often benefit from tangible and intangible resource sharing across member firms, little is known about whether and how sharing...     

Pay for Talk: How the Use of Shareholder‐Value Language Affects CEO Compensation

The language that signals conformity to a prevailing norm can contribute to the appearance of managerial competency and organizational legitimacy. We argue that top corporate managers’ use of language that is congruent with a prevailing norm leads the boards of directors to evaluate the managers more favourably and to grant a higher level of compensation. We test this argument by analysing the letters to shareholders from 334 US firms and examine the CEOs’ expression of the shareholder value principle, which is a prevailing model of corporate governance in the USA. We found that the use of shareholder‐value language is significantly related to a higher level of CEO compensation and that the effect of shareholder‐value language is greater when shareholder activism is stronger.