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The Impact of CEO Status Diffusion on the Economic Outcomes of Other Senior Managers

Author

Listed:
  • Scott D. Graffin

    (University of Georgia, Athens, Georgia 30602)

  • James B. Wade

    (McDonough School of Business, Georgetown University, Washington, D.C. 20057)

  • Joseph F. Porac

    (Kaufman Management Center, New York University, New York, New York 10012)

  • Robert C. McNamee

    (Rutgers Business School, Newark, New Jersey 07102)

Abstract

In this paper we develop and test predictions regarding the impact of CEO status on the economic outcomes of top management team members. Using a unique data set incorporating Financial World's widely publicized CEO of the Year contest, we found that non-CEO top management team members received higher pay when they worked for a high-status CEO. However, star CEOs themselves retained most of the compensation benefits. We also show that there is a “burden of celebrity” in that the above relationships were contingent on how well a firm performs. Last, we found that, when compared with the subordinates of less-celebrated CEOs, members of top management teams who worked for star CEOs were more likely to become CEOs themselves through internal or external promotions.

Suggested Citation

  • Scott D. Graffin & James B. Wade & Joseph F. Porac & Robert C. McNamee, 2008. "The Impact of CEO Status Diffusion on the Economic Outcomes of Other Senior Managers," Organization Science, INFORMS, vol. 19(3), pages 457-474, June.
    • Handle: RePEc:inm:ororsc:v:19:y:2008:i:3:p:457-474
    DOI: 10.1287/orsc.1080.0354
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    References listed on IDEAS

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