A Sensemaking Model of Investor Reactions to CEO Achievement Expression

Prior research on investor reactions to CEO communication tends to focus on one linguistic cue at a time. Even when multiple cues are considered, they are often examined in an additive fashion as if they were independent from one another. Integrating sensemaking theory and research with terror management theory, we develop a sensemaking model that posits that investors do not react to routine cues from CEOs, such as achievement expression, in isolation. Instead, their reactions are moderated by nonroutine cues such as CEOs’ use of death-related words that trigger mortality salience. Under high mortality salience, CEO achievement expression indirectly enhances investors’ perceptions of firm investment attractiveness through agentic leader stereotypes and perceived leader competence. Two experiments with investors (Studies 1 and 2) and a panel study of U.S. S&P 500 firms (Study 3) support our model, showing that CEO achievement expression elicits stronger, more positive investor reactions under high mortality salience.