Multilevel analysis reveals distinct CEO, firm, and industry drivers of executive communication in S&P 1500 firms, indicating managerial voice intensifies under high-stakes scrutiny.
Key Points
To quantify the relative variance attributable to CEO, firm, and industry factors across executive conference-call communication and determine whether individual CEO influence strengthens under high-stakes conditions.
Evaluated quarterly earnings conference-call transcripts from S&P 1500 firms between 2010 and 2018.
Quantified four communication attributes—forward-looking information, external focus, tone, and concreteness—using established dictionaries and natural language processing.
Conducted multilevel variance partitioning with years nested within CEOs, firms, and industries, examining moderating effects of negative earnings surprises and analyst coverage.
Individual CEO effects accounted for 19% to 31% of communication variance, coexisting with firm-level (11% to 21%) and industry-level effects (5% to 16%).
CEO-attributable variability intensified during high-stakes conditions, specifically following negative earnings surprises and under low financial analyst coverage.
Individual CEO influence was substantially more pronounced during the unscripted question-and-answer portion of calls than during scripted management presentations.