The Role of CEO Power on CSR Reporting: The Moderating Effect of Linking CEO Compensation to Shareholder Return

María Consuelo Pucheta-Martínez and Isabel Gallego-Álvarez
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María Consuelo Pucheta-Martínez: Department of Finance and Accounting, Campus del Riu Sec s/n, Universidad Jaume I, 12071 Castellón de la Plana, Spain
Isabel Gallego-Álvarez: Department of Business Administration, Multidisciplinary Institute for Enterprise (IME), University of Salamanca, Edificio FES, 37007 Salamanca, Spain

Sustainability, 2021, vol. 13, issue 6, 1-19

Abstract: The aim of this research was to provide further evidence of the impact of the power of the Chief Executive Officer (CEO) on corporate social responsibility (CSR) disclosure. Additionally, we explore the moderating role of CEO compensation linked to shareholder return on the association between CEO power and CSR disclosure. The theories used follow agency theory and stakeholder theory and the sample comprised 9182 international firm-year observations collected from the Thomson Reuters database from 2009 to 2018. Our model was estimated using the generalized method of moments (GMM) estimator. The results found that CEO power was positively associated with CSR disclosure, contrary to our expectations. Additionally, our evidence also shows that CEO compensation linked to shareholder return plays a positive moderating role on the relationship between CEO power and CSR reporting.

Keywords: CEO power; corporate social responsibility reporting; CEO compensation link to shareholder return; agency theory; stakeholder theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:6:p:3197-:d:517054

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