The Impact of Corporate Social Responsibility on Ceo Compensation

Based on 1575 firms-year observations from French companies listed on the Paris stock exchange from 2009 to 2017, this research study investigates the linkage between accounting conservatism and highest-paid chief executive officers (CEOs) and if this linkage increases as executive remuneration-performance sensitivity increases. The study’s findings show that there is a negative association between accounting conservatism and highest-paid CEOs. These findings suggest that the highest-paid CEOs can manage and restrict managerial accounting choices for their own gains, and, in turn, this has a negative effect on accounting conservatism. Firstly, in order to achieve generally discretionary goals, they distort the accounting figures by overvaluing their companies’ gains. Secondly, the negative linkage between accounting conservatism and highest-paid CEOs increases when they receive greater remuneration incentives for accounting performance. These findings indicate that powerful CEOs are incentivized to adjust earnings since the greater incentives help them to inflate their companies’ accounting results; to distort accounting performance, and provide investors with misleading information. In turn, such actions generate the ex-post settling up problems and end, unfortunately, in fraudulent behaviors. This study contributes to the literature that studies the relationship between accounting conservatism and the highest-paid senior executives in order to identify accounting conservatism (Iwasaki, Otomasa, Shiiba, & Shuto, 2018; Li, Henry, & Wu, 2019; Haider, Singh, & Sultana, 2021).

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Do the highest-paid CEOs affect the accounting conservatism? An empirical investigation in France

Aguir

Alqatan

Bzeouich

2021

JGR

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Effets de l’intégration de critères RSE dans la rémunération des dirigeants sur la performance sociale et financière des entreprises françaises cotées

Godard¹,

Khemir²

2023

fcs

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Basée sur l’approche de la gouvernance partenariale, cette recherche analyse la relation entre l'intégration de critères de responsabilité sociale de l’entreprise (RSE) dans la rémunération des dirigeants et la performance sociale et financière des entreprises du SBF 120 entre 2015 et 2019. Les résultats des régressions sur données de panel montrent que l'indexation de la rémunération des dirigeants sur des critères RSE a une influence positive uniquement sur la performance sociale. De plus, cette dernière a un impact positif sur la performance financière et un effet médiateur entre l'intégration de critères RSE dans la rémunération des dirigeants et la performance financière.

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Integration of CSR into CEOs’ compensation: effects on social and financial performance of French listed firms

Godard¹,

Khemir²

2023

fcs

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Based on the stakeholder model of corporate governance, this research analyzes the relationship between the integration of corporate social responsibility (CSR) into CEO compensation and corporate social and financial performance, in firms listed on France’s SBF 120 stock market between 2015 and 2019. The results of panel data regressions show that indexing CEO compensation on CSR criteria only influence corporate social performance Moreover, social performance has a positive impact on financial performance and a mediating effect between the integration of CSR criteria into CEO compensation and financial performance.

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The Impact of Corporate Social Responsibility on Ceo Compensation

Cited by 3 publications

References 13 publications

Do the highest-paid CEOs affect the accounting conservatism? An empirical investigation in France

Do the highest-paid CEOs affect the accounting conservatism? An empirical investigation in France

Effets de l’intégration de critères RSE dans la rémunération des dirigeants sur la performance sociale et financière des entreprises françaises cotées

Integration of CSR into CEOs’ compensation: effects on social and financial performance of French listed firms

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