Regulators have increased the disclosure requirements of top executives as part of corporate governance reform. This study examines how trust arising from a firm’s corporate reputation will interact with top executive compensation disclosure to influence investor judgments. This study used a 2 X 2 between subjects experimental design, with corporate reputation (good versus bad) and pay ratio (high versus low) as independent variables to test the hypotheses. The key findings show that if the firm with a good corporate reputation discloses a high pay ratio, participants punished the good reputation firm more than the bad reputation firm, demonstrating a negative violation of expectations. On the other hand, if the firm with a bad corporate reputation discloses a low pay ratio, participants rewarded the bad reputation firm more than the good reputation firm, demonstrating a positive violation of expectations. Seow, Poh-Sun and Goh, Clarence and Pan, Gary, The Effects of Corporate Reputation and Compensation Disclosure on Investor Judgments (January 7, 2019). 2019 Canadian Academic Accounting Association (CAAA) Annual Conference; Singapore Management University School of Accountancy Research Paper No. 2019-10

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All quoted companies with more than an average of 250 UK employees during the year must make additional remuneration disclosures including reporting the ratio of CEO pay to average pay of the UK workforce. Critically explore the potential consequences of the findings of Seow et al (2019) on remuneration policy for CEO’s and conclude whether disclosure rather than regulation is an appropriate mechanism to curb executive excess.