انگیزه های ریسک پذیری مدیر عامل و فعالیت های غیر مسئولانه
Abstract
1- Introduction
2- Hypotheses development
3- Data and methodology
4- Results
5- Conclusion
References
Abstract
This study examines the relationship between CEO risk-taking incentives, measured by the sensitivity of CEO wealth held in options to a change in stock return volatility or Vega, and socially irresponsible activities using a large sample of U.S. firms during the period 1992–2012. Our results for the period before the 2007 financial crisis suggest that CEO risk-taking incentives are positively related to socially irresponsible activities. In addition, we find that a firm's socially responsible actions may act as a moderator, strengthening the aforementioned relationship. The results after the 2007 financial crisis show no evidence of a significant relationship between CEO risk-taking incentives and socially irresponsible activities. This could be due to the increased scrutiny regarding compensation packages and the increased role of reputational issues in the aftermath of the financial crisis. Our results suggest that risk-taking incentives embedded in the CEO compensation scheme have implications for corporate policies toward socially irresponsible activities.
Introduction
The concept of corporate social responsibility (CSR) has received considerable attention by academics and practitioners as firms face pressure from various internal and external stakeholders to integrate CSR into company actions and operations (Borghesi et al., 2014, Crifo and Forget, 2015). CSR is defined as voluntary activities conducted by firms to achieve social goals (McWilliams and Siegel, 2001). In managerial terms, it means that the firm should be profitable, ethical and comply with the law (Carroll, 1999). These definitions focus more on socially responsible activities related to positive actions and outcomes, and less on the other side of the same coin, namely socially irresponsible activities related to negative actions and outcomes (Kotchen and Moon, 2012). This distinction is crucial as the same firm might be involved in both socially responsible and irresponsible activities (Mattingly and Berman, 2006; Scholtens and Zhou, 2008; Chatterji et al., 2009). The literature linking executive compensation and CSR have mainly focused on how specific components of compensation packages (i.e., salary, bonus, stock awards and stock options) affect firms' involvement in socially responsible or irresponsible activities (McGuire et al., 2003; Deckop et al., 2006; Mahoney and Thorne, 2005, 2006; Cai et al., 2011; Rekker et al., 2014).1 This literature provides mixed evidence, for example, McGuire et al. (2003) find that CEO salary and the percentage of long-term incentive payments (i.e., stock options and other long-term incentives) in the CEO’s compensation package have a positive association with socially irresponsible activities. In contrast, Mahoney and Thorne (2005) find that long-term compensation (i.e., stock option grants divided by total compensation) is associated with lower socially irresponsible activities. Mahoney and Thorne (2006) find that CEO stock options are positively related to socially responsible activities.