CEO Employee Approval and Firm Value: Evidence from Employees' Choice Awards

Abstract

This study examines the impact of a chief executive officer (CEO) winning an employee opinion award on firm value. Leveraging close employee vote shares in a regression discontinuity specification from Glassdoor's "Top CEOs Employees' Choice" award list suggest a causal link of the relationship. Narrowly winning an employees' choice CEO award results in an increase in firm value in following years. An increase in firm efficiency is the likely economic channel that influences an increase in firm value. The findings imply that CEO and employee relationships are an important intangible good for corporate governance.