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Value or Glamour? An empirical investigation of the effect of celebrity CEOs on financial reporting practices and firm performance


  • This article has benefited from useful comments from Mike Bradbury (Deputy Editor), an anonymous reviewer, Shiva Rajgopal, Marcus Caylor, Jarrad Harford, David Hirshleifer, Jon Karpoff, Dawn Matsumoto, Terry Shevlin, Lan Shi, Siew Hong Teoh, Yen Hee Tong, and conference participants at the 2007 American Accounting Association annual meeting. I also acknowledge financial support from Nanyang Technological University.


In this study, I investigate the impact of managerial reputation, as proxied by high-profile awards to CEOs, on financial reporting practices and firm performance. Using a sample of 269 awards given to 189 celebrity CEOs (CEOs who win awards) from 1987 to 2003, I compare within-firm changes in financial reporting practices and firm performance before and after each CEO wins their first award. I find that celebrity CEOs engage in more conservative accounting practices and are less likely to engage in opportunistic earnings management to meet short-term earnings benchmarks. In addition, firm performance improves after celebrity CEOs win awards.