Powerful CEOs and employee relations: evidence from corporate social responsibility indicators

Joan Wiggenhorn (), Seema Pissaris () and Kimberly Gleason ()

Journal of Economics and Finance, 2016, vol. 40, issue 1, 85-104

Abstract: In this paper, we investigate whether powerful CEOs who dominate the top management team exhibit positive or negative behavior towards their employees. Somewhat surprisingly, we find that CEO power as evidenced by high pay disparity between the CEO and top management, results in positive Employee Relations as measured by the KLD Statistics. We also find that CEO power affects the individual categories of Employee Involvement as well as Employee Health and Safety, indicating that pay disparity positively effects Employee Relations on a number of measures. However, the strong positive relationship is not found when the CEO holds the dual role of Chairman. In addition, neither measure tests positive for union relations, although high profitability, as measured by industry adjusted Return on Assets, appears to permit firms to have positive relations with employees on a number of different measures. Copyright Springer Science+Business Media New York 2016

Keywords: CEO compensation; CEO pay disparity; Powerful CEOs; Employee relations; KLD measures; M14 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s12197-014-9295-1

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