Study: CEO media appearances associated with 6-figure increase in pay

Media appearances can increase CEO pay by as much as $210,239 on average, according to a study published in Organization Science.

The study examined 4,452 CEOs at 2,666 U.S. companies from 1997 to 2009. After controlling for performance and other factors, the researchers found interviews on CNBC were associated with an average compensation increase of $210,239 in the next year. They also found every 1 percent more newspaper coverage over a CEO's average newspaper coverage was associated with a 0.028 percent increase in salary the following year.

Interestingly, the researchers identified a stronger correlation among smaller firms. For example, the average increase in pay for a CNBC appearance from a CEO of a smaller company was $130,925 more than for CEOs of larger firms. The researchers suggest this is because media appearances enhance visibility more for smaller, lesser known companies, and larger companies and their CEOs are already well-known, so media appearances are less likely to change pay. If a company is doing well and stock performance is strong, media appearances tend to increase pay even more, the study found.

However, researchers identified one group of CEOs where media appearances had no effect on pay — founder CEOs, or leaders with a high equity ownership in the company. For these CEOs, the relationship disappeared entirely. The researchers suggest this may be because founder CEOs or CEOs with a large stake in the company identify more closely with its success and are less motivated to pay themselves more.


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