CEO media coverage and cash holdings

Abstract

Utilising a unique hand-collected dataset, this paper examines the relationship between media coverage of chief executive officers (CEOs) and cash holding. Using a sample of all stocks listed on the S&P 500 over the period 2005–2020, we find a positive and significant relationship between CEO media coverage and cash holdings. Our additional analyses demonstrate that CEO mobility and firm age positively moderate the relationship between CEO media coverage and corporate cash holdings, whereas CEO reputational capital and CEO tenure negatively moderate this relationship. This implies that CEOs with intensive media coverage tend to hold more cash than those with non-intensive media coverage because the media pays more attention to covering reputed CEOs who are characterised by great potential. Therefore, those with intensive media coverage hold more cash because they have more to lose in terms of future career outlook and financial incentives, especially since their reputations are fragile and easily damaged.