From profits to purpose: ESG practices, CEO compensation and institutional ownership

IF 4.1 3区管理学 Q2 BUSINESS Management Decision Pub Date : 2024-02-13 DOI:10.1108/md-06-2023-0932

Luigi Nasta, Barbara Sveva Magnanelli, Mirella Ciaburri

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Abstract

Purpose

Based on stakeholder, agency and institutional theory, this study aims to examine the role of institutional ownership in the relationship between environmental, social and governance practices and CEO compensation.

Design/methodology/approach

Utilizing a fixed-effect panel regression analysis, this research utilized a panel data approach, analyzing data spanning from 2014 to 2021, focusing on US companies listed on the S&P500 stock market index. The dataset encompassed 219 companies, leading to a total of 1,533 observations.

Findings

The analysis identified that environmental scores significantly impact CEO equity-linked compensation, unlike social and governance scores. Additionally, it was found that institutional ownership acts as a moderating factor in the relationship between the environmental score and CEO equity-linked compensation, as well as the association between the social score and CEO equity-linked compensation. Interestingly, the direction of these moderating effects varied between the two relationships, suggesting a nuanced role of institutional ownership.

Originality/value

This research makes a unique contribution to the field of corporate governance by exploring the relatively understudied area of institutional ownership's influence on the ESG practices–CEO compensation nexus.

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从利润到目的：环境、社会和公司治理实践、首席执行官薪酬和机构所有权

目的基于利益相关者、代理和机构理论，本研究旨在探讨机构所有权在环境、社会和治理实践与首席执行官薪酬之间关系中的作用。设计/方法/途径本研究利用固定效应面板回归分析，采用面板数据方法，分析了从 2014 年到 2021 年的数据，重点关注 S&P500 股票市场指数中的美国上市公司。数据集包含 219 家公司，共 1,533 个观测值。研究结果分析发现，与社会和治理得分不同，环境得分对 CEO 股权挂钩薪酬有显著影响。此外，分析还发现，在环境得分与 CEO 股权挂钩薪酬之间的关系中，以及在社会得分与 CEO 股权挂钩薪酬之间的关系中，机构所有权是一个调节因素。有趣的是，在这两种关系中，这些调节作用的方向各不相同，这表明机构所有权发挥着微妙的作用。原创性/价值这项研究通过探索机构所有权对环境、社会和治理实践--CEO 薪酬关系的影响这一相对研究不足的领域，为公司治理领域做出了独特的贡献。

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来源期刊

Management Decision Multiple-

CiteScore

8.20

自引率

8.70%

发文量

126

期刊介绍： ■In-depth studies of major issues ■Operations management ■Financial management ■Motivation ■Entrepreneurship ■Problem solving and proactivity ■Serious management argument ■Strategy and policy issues ■Tactics for turning around company crises Management Decision, considered by many to be the best publication in its field, consistently offers thoughtful and provocative insights into current management practice. As such, its high calibre contributions from leading management philosophers and practitioners make it an invaluable resource in the aggressive and demanding trading climate of the Twenty-First Century.