EconPapers    
Economics at your fingertips  
 

Air pollution and CEO compensation: Evidence from China

Kam C. Chan, Tao Chen (), Baohua Liu and Junfeng Wu

Journal of Economics & Management Strategy, 2022, vol. 31, issue 2, 448-469

Abstract: This paper complements the literature on green finance by probing whether air pollution matters for CEO compensation. Using a sample covering 240 cities in 31 provinces in China from 2005 to 2017, we document a positive association between air pollution and CEO compensation. These findings indicate that firms headquartered in areas with unhealthy air compensate their CEOs with higher pay than those headquartered in areas with better air quality. Moreover, two potential channels are validated to interpret the positive pollution‐pay linkage: income comparison and executive shortage. Finally, we show that air pollution attenuates the pay‐performance sensitivity, indirectly confirming an essential role of the living environment in determining CEO compensation.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/jems.12457

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:bla:jemstr:v:31:y:2022:i:2:p:448-469

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-12-24
Handle: RePEc:bla:jemstr:v:31:y:2022:i:2:p:448-469