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Executive Compensation in Socially Responsible Firms
Author(s) -
Frye Melissa B.,
Nelling Edward,
Webb Elizabeth
Publication year - 2006
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/j.1467-8683.2006.00517.x
Subject(s) - executive compensation , chief executive officer , business , accounting , compensation (psychology) , sample (material) , monetary economics , finance , corporate governance , economics , management , psychology , chemistry , chromatography , psychoanalysis
This study examines chief executive officer (CEO) compensation and turnover in socially responsible (SR) firms. We compare characteristics of SR firms with a matched sample of firms based on industry and size. Analysis of CEO compensation indicates that the link between CEO pay and firm performance is weaker for SR firms than for non‐SR firms. CEO turnover tests indicate that SR firms are more likely to experience CEO turnover following poor performance. Stock option grants to CEOs of SR firms do not appear to result in future risk‐taking behaviour, whereas such grants are significantly related to future risk at non‐SR firms.