Conceptualizing shareholder unrest as the aggregate scale and gravity of shareholder dissatisfaction with company practices, we examine the effects of two distinct types of shareholder unrest-wealth-oriented and corporate social responsibility (CSR)-oriented unrest-on CEOs' career outcomes. Drawing on the concept of settling up, we hypothesize that CEOs are negatively sanctioned for both types of unrest in terms of reduced pay and increased likelihood of dismissal. Drawing on executive job demands theory, we argue that incumbent CEOs feel burdened by both types of unrest, leading them to voluntarily depart, and that new CEOs of unrest-laden firms receive larger pay packages as compensation for dealing with these inherited job demands. Overarching all these expectations, we argue that the effects of CSR-oriented unrest will be greater than the effects of wealth-oriented unrest, as CSR-oriented unrest occurs in a domain where alternative performance indicators are few and noisy, causing CSR-oriented unrest to be seemingly more meaningful. Testing our ideas on a longitudinal sample of U.S. corporations, we find considerable but not total support for our hypotheses, which we then interpret and discuss.
All Science Journal Classification (ASJC) codes
- Business and International Management
- General Business, Management and Accounting
- Strategy and Management
- Management of Technology and Innovation