“Messaging without a Message: Executive Value and Social Media” by Professor Gilles Hilary
Professor Gilles Hilary
McDonough School of Business
Facing limited attention capacity and complex choices, boards are likely to favor individuals with salient profiles. Consistent with this view, executives who start tweeting benefit from an increase in compensation. Tweeting also creates better career options for these executives, both within and outside their firms. Although the decision to start tweeting may not be strategic, our tests suggest a causal relationship between social media activity and compensation. Importantly, content appears to be largely irrelevant. Our comparative statistics are consistent with a limited attention framework. In particular, the effect of Twitter is greater for executives who are underpaid, who enjoy higher professional mobility, who garner a larger public attention from their social media activity, and who were largely unrecognized before they started tweeting.