{"title":"Employee satisfaction and CEO pay-performance sensitivity","authors":"Heung-Jae Jeon","doi":"10.1016/j.ribaf.2025.102883","DOIUrl":null,"url":null,"abstract":"<div><div>This paper investigates the impact of employee satisfaction on CEO pay-performance sensitivity within a sample of S&P 1500 firms with an enough number of Glassdoor.com employee ratings. The results indicate that an increase in employee satisfaction is associated with a higher level of CEO pay-performance sensitivity, with this effect being more pronounced when there is a greater likelihood of CEOs being entrenched. These findings align with the notion that heightened employee satisfaction can create uncertainty among shareholders regarding the CEO’s motivations. Consequently, this study contributes to the existing literature on agency problems and the ongoing discourse surrounding employee welfare, supporting optimal contracting theory.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"77 ","pages":"Article 102883"},"PeriodicalIF":6.9000,"publicationDate":"2025-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in International Business and Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0275531925001394","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This paper investigates the impact of employee satisfaction on CEO pay-performance sensitivity within a sample of S&P 1500 firms with an enough number of Glassdoor.com employee ratings. The results indicate that an increase in employee satisfaction is associated with a higher level of CEO pay-performance sensitivity, with this effect being more pronounced when there is a greater likelihood of CEOs being entrenched. These findings align with the notion that heightened employee satisfaction can create uncertainty among shareholders regarding the CEO’s motivations. Consequently, this study contributes to the existing literature on agency problems and the ongoing discourse surrounding employee welfare, supporting optimal contracting theory.
期刊介绍：
Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance
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