CATONSVILLE, Md. — Chief executives looking to add some extra oomph to their compensation packages may want to pitch an interview idea or two to CNBC. A new study finds that CEOs, particularly for smaller firms, who appeared on the cable business news network enjoyed raises of at least $200,000 that year — regardless of company performance.
Researchers from Singapore and South Korea examined more than 6,500 CNBC interviews and 104,000 news articles under the theory that CEOs who receive media exposure enjoy greater compensation. The authors used a database of nearly 4,500 CEOs across 2,666 firms between 1997 and 2009 to verify their hypotheses.
The team found that while newspaper coverage led to modest raises for company heads, CEOs featured on CNBC interviews saw an annual pay increase of $210,239 on average. Interviews had a more significant impact on compensation if the CEO headed a generally small company and/or if the company’s stock seemed to improve following the appearance. In fact, CEOs of smaller companies that showed strong performance after the interview received nearly $131,000 more than those from large firms.
The researchers pointed to the valuable visibility that the CEOs of smaller organizations experience from the segments that they’re not usually receiving.
“For highly visible CEOs of larger firms, media appearances will only have a small visibility-enhancing effect,” says study co-author Jingoo Kang, from the Nanyang Business School in Singapore, in a press release. “On the other hand, for CEOs of smaller companies who are less well known, media appearances will have a strong visibility-enhancing effect.”
CEOs from large companies saw little benefit from being featured by the media, as did the execs who owned a significant portion of the company and those who were founding CEOs.
The authors also found that a segment’s tone influenced the outcome of a CEOs raise.
“When the tone of the media is more negative, the positive relationship between the media appearance and compensation becomes weaker,” says Andy Han Kim of Sungkyunkwan University Business School in South Korea. “In contrast, in the CEO news article models, we did not find a statistically significant interaction.”
The study’s findings will be published in the upcoming volume of the INFORMS journal Organization Science.