Compensation peer effects of corporate social responsibility

IF 7.2 1区 经济学 Q1 BUSINESS, FINANCE Journal of Corporate Finance Pub Date : 2024-10-04 DOI:10.1016/j.jcorpfin.2024.102679
Yuyuan Chang , Nicolai J. Foss , Shuping Li , Jing Xie
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Abstract

This article examines the role of CEOs' personal incentives in steering their firms' CSR initiatives following their compensation peers, subsequently influencing their career trajectories within their current firms. Specifically, we find that firms exhibit better corporate social responsibility (CSR) performance if their compensation peer (CP) firms demonstrated superior CSR performance in the prior year (i.e., the CP effect). To mitigate the endogeneity concern, we conduct analyses based on the termination (initiation) of CPs' peer relation with the focal firm, a benchmark test, and an instrumental variable analysis. To establish the mechanisms of internal monetary rewards from their firms and enhanced external career tournaments in the labor market, we show the CP effect is stronger if the focal company CEOs have compensation contracts specifying CSR performance targets, face a larger compensation shortfall relative to their CP counterparts, operate in closer geographical proximity to those CP CEOs, or hire more compensation consultants. Furthermore, we find that the probability and quantity of CSR contracts received by focal firms' CEOs increase with CPs' lagged CSR. CEOs receive higher compensation than those in CP firms after they deliver better CSR performance than their CPs. Overall, our paper highlights the role of CEOs' personal incentives in steering their firms' CSR initiatives, subsequently influencing their career trajectories within their current organizations.
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企业社会责任的薪酬同行效应
本文研究了首席执行官的个人激励机制在引导其公司的企业社会责任举措追随薪酬同行,进而影响其在当前公司的职业发展轨迹方面所起的作用。具体而言,我们发现,如果薪酬同行(CP)的公司在上一年表现出卓越的企业社会责任(CSR)绩效,那么这些公司就会表现出更好的企业社会责任(CSR)绩效(即 CP 效应)。为了减少内生性问题,我们根据 CP 与焦点公司同行关系的终止(开始)、基准测试和工具变量分析进行了分析。为了建立公司的内部货币奖励机制和劳动力市场的外部职业竞争机制,我们发现,如果焦点公司首席执行官的薪酬合同中明确规定了企业社会责任绩效目标,相对于他们的CP同行面临更大的薪酬缺口,与这些CP首席执行官在更近的地理位置上运营,或者聘请了更多的薪酬顾问,那么CP效应就会更强。此外,我们还发现,焦点公司首席执行官获得企业社会责任合同的概率和数量会随着 CP 的滞后企业社会责任而增加。首席执行官在企业社会责任表现优于其 CP 时,获得的报酬会高于 CP 公司的首席执行官。总之,我们的论文强调了首席执行官的个人激励在引导公司的企业社会责任举措方面所起的作用,进而影响了他们在当前组织内的职业发展轨迹。
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来源期刊
Journal of Corporate Finance
Journal of Corporate Finance BUSINESS, FINANCE-
CiteScore
11.80
自引率
3.30%
发文量
0
期刊介绍: The Journal of Corporate Finance aims to publish high quality, original manuscripts that analyze issues related to corporate finance. Contributions can be of a theoretical, empirical, or clinical nature. Topical areas of interest include, but are not limited to: financial structure, payout policies, corporate restructuring, financial contracts, corporate governance arrangements, the economics of organizations, the influence of legal structures, and international financial management. Papers that apply asset pricing and microstructure analysis to corporate finance issues are also welcome.
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