Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Business
Research Note: Investor Perceptions Of Comparable-To-Industry Versus Higher-Than-Industry Pay Ratio Disclosures, Khim Kelly, Jean Lin Seow
Research Note: Investor Perceptions Of Comparable-To-Industry Versus Higher-Than-Industry Pay Ratio Disclosures, Khim Kelly, Jean Lin Seow
Research Collection School Of Accountancy
The usefulness of the CEO-to-employee pay ratio disclosure to investors is subject to significant debate. Our experiment examines participant responses to higher-than-industry and comparable-to-industry pay ratio disclosures in a company. A prior experiment by Kelly and Seow (2016) (hereafter KS) found that incrementally disclosing a higher-than-industry pay ratio on top of higher-than-industry CEO pay had indirect negative effects on the company’s perceived investment potential, via negative perceptions about the fairness of the CEO pay and workplace climate. We find that the negative indirect effects of pay ratio disclosures on perceived investment potential in KS are replicable in our study, and …