Executive Compensation and Environmental Harm

Dylan Minor ()
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Dylan Minor: Harvard Business School, Strategy Unit

No 16-076, Harvard Business School Working Papers from Harvard Business School

Abstract: We explore the relationship between managerial incentives and environmental harm. We find that high-powered executive compensation packages can increase the odds of environmental law-breaking by 40-60% and the magnitude of environmental harm by over 100%. We document similar results for the setting of executive compensation and financial accounting misconduct. Finally, we outline some managerial and policy implications to blunt these adverse incentive effects.

Keywords: executive compensation; corporate governance; misconduct; environmental performance; accounting scandal; sustainable finance (search for similar items in EconPapers)
JEL-codes: G01 G31 J33 K32 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2016-01, Revised 2016-04
New Economics Papers: this item is included in nep-acc, nep-env, nep-hrm, nep-law and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:16-076

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