Title: How does CEO incentive matter for corporate social responsibility disclosure? Evidence from global corporations based in the USA

Authors: Hien Thi Tran; Hanh Song Thi Pham

Addresses: Vietnam National University Hanoi, 144 Xuan Thuy Str., Cau Giay Dist., Hanoi, Vietnam ' Sheffield Hallam University, City Campus, Howard St, Sheffield S1 1WB, UK

Abstract: This study investigates the effect of each component of CEO compensation, including cash-based component (salary and bonus), equity-based component (stock grant and stock option), and other perks on disclosure of corporate social responsibility (CSR) information of global firms. The study uses 2SLS IV estimation method and a sample of 580 US-based firms in a seven-year period. The study finds that equity-based remuneration has a significant and positive impact on a firm's CSR disclosure while CEO salary, bonus, and other perquisites have significant detrimental effects on CSR disclosure. The paper indicates that a CEO's motivation for CSR reporting might arise from stock grant and option; meanwhile, salary, bonus and other perks could demotivate the CEO in this regard. Our findings offer insight into designing CEO compensation packages to meet shareholders' interests and stakeholders' expectations for a sustainable business.

Keywords: corporate social responsibility; CSR; disclosure; CEO; incentive; compensation; remuneration.

DOI: 10.1504/IJBGE.2022.126171

International Journal of Business Governance and Ethics, 2022 Vol.16 No.4, pp.463 - 480

Received: 27 Jan 2021
Accepted: 12 May 2021
Published online: 14 Oct 2022 *

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