Purpose

Borderline firms whose bond rating has a plus or minus specification by a rating agency face a greater potential for an upgrade or downgrade by the agency. The authors examine the level of chief executive officer (CEO) power in firms with a plus or minus bond rating. The authors test whether CEOs of these firms become more or less powerful, along with the effect of corporate governance and existing bond rating.

Design/methodology/approach

The authors use a panel sample with 16,429 observations from 1992 to 2016 from the ExecuComp database.

Findings

The authors find that CEOs of borderline-rated firms tend to be less powerful, relative to firms with a non-proximate rating. This result is largely present in firms with a plus rating. The authors also find that our primary findings are mainly driven by firms with low bond ratings (i.e. below investment grade) or by firms with weak corporate governance. Lastly, the authors document that CEO personal characteristics (i.e. CEO age, gender and tenure) impact our findings.

Research limitations/implications

First, firms in our sample are large public companies, and the external validity of our results to smaller firms that may also be private is unknown. Second, the Compustat database discontinued reporting bond rating data (i.e. S&P bond ratings) in 2017. Hence, the authors are unable to analyze the CEO power of borderline firms in years after 2016.

Practical implications

The study contributes to the larger debate on whether having powerful CEOs is beneficial to an organization or not, because prior research has examined the consequences of CEO power with mixed results. The authors document evidence to support the research stream that links CEO power to negative consequences.

Social implications

The authors find that our primary results are enhanced in firms with weak corporate governance, which is consistent with prior research that finds effective governance may mitigate CEO power and agency problems between the CEO and the Board.

Originality/value

Prior research primarily uses CEO power as a driver for performance. Our study focuses on CEO power as a dependent variable, with the bond rating change proximity as a driver of CEO power. The authors believe that this helps develop a more comprehensive understanding of CEO power.

中文翻译：

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接近广泛的债券评级变化和 CEO 权力

目的

评级机构对其债券评级为正负规范的边缘公司面临更大的评级机构上调或下调评级的可能性。作者研究了债券评级为正或负的公司的首席执行官 (CEO) 权力水平。作者测试了这些公司的 CEO 是否变得更有权势，以及公司治理和现有债券评级的影响。

设计/方法/方法

作者使用了 ExecuComp 数据库中从 1992 年到 2016 年的 16,429 个观测值的面板样本。

发现

作者发现，与非近似评级公司相比，边缘评级公司的 CEO 往往权力较小。这一结果主要出现在评级为正的公司中。作者还发现，我们的主要发现主要是由债券评级低（即低于投资级别）的公司或公司治理薄弱的公司驱动的。最后，作者记录了 CEO 的个人特征（即 CEO 年龄、性别和任期）影响我们的发现。

研究限制/影响

首先，我们样本中的公司是大型上市公司，我们的结果对可能也是私有的小型公司的外部有效性是未知的。其次，Compustat 数据库在 2017 年停止报告债券评级数据（即标准普尔债券评级）。 因此，作者无法分析 2016 年后几年边缘公司的 CEO 权力。

实际影响

该研究引发了关于拥有强大的 CEO 是否对组织有益的更大辩论，因为先前的研究已经研究了 CEO 权力的后果，结果喜忧参半。作者记录了支持将 CEO 权力与负面后果联系起来的研究流的证据。

社会影响

作者发现，我们的主要结果在公司治理薄弱的公司中得到了增强，这与之前的研究一致，即发现有效的治理可以减轻 CEO 权力和 CEO 与董事会之间的代理问题。

原创性/价值

先前的研究主要使用 CEO 权力作为绩效的驱动因素。我们的研究将 CEO 权力作为因变量，债券评级变化接近度作为 CEO 权力的驱动因素。作者认为，这有助于更全面地了解 CEO 权力。