Abstract
Large CEO pay packages have become the subject of increased negative scrutiny among the media and general public, suggesting that CEO compensation may affect the firm by influencing stakeholder perceptions and behaviors. Although some recent research has begun to study the association between high CEO compensation and CEO greed, whether and how CEO greed is perceived by stakeholders remains to be examined. We develop theory on CEO compensation and broaden our understanding of its consequences by examining whether and how CEO compensation leads to perceptions of CEO greed. Focusing on job seekers, a population especially likely to attend to information about firms and CEOs, we find evidence that high CEO compensation leads to perceptions of CEO greed among job seekers and that such perceptions lowers job seekers’ attraction to the CEO’s firm. Moreover, we find that these relationships are weakened for job seekers who themselves exhibit high levels of greed.
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