Corporate executives’ incentives and ESG performance

Ga-Young Jang, Hyoung-Goo Kang and Woojin Kim

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This study investigates the effect of managers' manipulative tendencies on firms’ environmental, social, and governance (ESG) performance using the share pledging and earnings management data from FY2015 to FY2020. We find that corporate executives’ share pledging activities negatively affect firms’ ESG performance. The effect is salient for the environmental and social but governance criteria. Furthermore, we find weak evidence for the relationship between earnings management and ESG performance. The results imply that the managers who manage earnings in order to increase their monetary income may care less about ESG performance that is not strongly aligned to their compensation.

Keywords: Earnings management; ESG; Executive compensation; Incentives; Share pledging (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612322003932
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003932

DOI: 10.1016/j.frl.2022.103187

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().