CEO Visibility: Are Media Stars Born or Made?

Recent literature finds that a CEO's media visibility leads to improved career outcomes. However, the literature has been quiet about whether media coverage is naturally bestowed on CEOs for operating performance, or whether firms and/or CEOs are able to influence media coverage through strategic disclosure. That is, are CEO media stars "born" from their performance or "made" by managing the press? We characterize CEO media coverage as the outcome of a journalist's cost-benefit production decision, and posit that firms can lower journalists' expected production costs via strategic disclosure. Specifically, we predict that production costs of CEO coverage are affected by "CEO promotion," which we define as the extent to which CEO-specific content is provided in a firm's press release. Our measure of CEO promotion is based on whether the CEO is named or quoted in firm-initiated press releases, as well as the clarity and vividness of the CEO's quotes. Consistent with CEO promotion reducing journalists' production costs, we find that CEO promotion is associated with a more than three-fold increase in the likelihood of media coverage of the CEO, and that the flow of specific CEO-related content from press releases into subsequent media articles is increasing with CEO promotion. Additional analysis indicates that CEO content improves the tone of media coverage, but also that abnormally high levels of CEO promotion are consistent with CEO rent extraction, as evidenced by higher CEO entrenchment and declining firm value. Our evidence that firms can influence CEO media coverage not only broadens our understanding of the causes and effects of CEO media visibility, but also indicates that firms can likely influence the content and context of firm-related media articles more generally.

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