Rath, Chetna, Tripathy, Asit and Mangla, Sachin Kumar (2024) How the social dimension of ESG influences CEO compensation: Role of CEO and board characteristics. Business Strategy and the Environment. ISSN 0964-4733 (In Press)
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This paper examines whether social disclosures impact CEO compensation considering various CEO and board controls. By categorizing CEO-specific attributes into CEO duality, CEO academic diversity, and insider CEO, as well as including board size and board independence as board-specific controls, the study tests their effects on CEO compensation. This research further explores whether board gender diversity moderates the association between social disclosures and CEO compensation. The paper uses a balanced panel dataset of 67 firms extracted from the NSE Nifty 100 ESG index and applies the panel-corrected standard error (PCSE) model as a baseline methodology. The findings revealed that the environmental, social, and governance (ESG) disclosure score significantly impacted the CEO compensation, whereas social disclosure scores assessed independently failed to create a significant association with the same. Subsequent investigation also showed a significant positive relationship between the number of female directors on the board and CEO compensation. However, female directors on the board could not amplify the firm's social disclosure practices, leading to an insignificant impact on CEO compensation. While board independence, board size, ownership structure, and CEO duality significantly affected the above relationship, insider CEO status could not. Furthermore, robustness checks using the propensity score matching (PSM) and generalized method of moments (GMM) models were also conducted to test the validity of the above results. The findings of the work offer insights to help managers, organizations, and policy planners make decisions concerning women directors, social disclosures, and CEO compensation.
Item Type: | Article |
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Keywords: | board characteristics | CEO attributes | CEO compensation | ESG disclosure | gender diversity | India | social scores |
Subjects: | Social Sciences and humanities > Business, Management and Accounting > General Management Social Sciences and humanities > Business, Management and Accounting > Human Resource Management Social Sciences and humanities > Social Sciences > Social Sciences (General) |
JGU School/Centre: | Jindal Global Business School |
Depositing User: | Dharmveer Modi |
Date Deposited: | 28 Oct 2024 13:32 |
Last Modified: | 28 Oct 2024 13:32 |
Official URL: | https://doi.org/10.1002/bse.4008 |
URI: | https://pure.jgu.edu.in/id/eprint/8729 |
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