Executive communication with stakeholders is a critical task of top executives. This communication is often assumed to reflect executives’ attributes, cognitions, and motivations. However, another perspective is that executive communication is strategic and used for impression management purposes. In this paper, we extend the impression management perspective of executive communication by examining how strategic communication regarding executives’ motivational orientations can shape investors’ responses to financial information. Specifically, we study external stakeholders’ reactions to strategic executive communication regarding growth and achievement (a promotion focus) as well as strategic executive communication regarding security and the avoidance of failure (a prevention focus). We find that external stakeholders are responsive to the fit between strategic executive communication and the financial context during quarterly earnings calls such that when recent firm financial performance is positive, strategic promotion focus communication is positively associated with stock market returns. However, when recent firm financial performance is negative, strategic prevention focus communication is positively associated with stock market returns. Our study has several theoretical implications for the study of impression management and regulatory focus communication.
