Corporate Social Responsibility (CSR) and CEO Luck: Are Lucky CEOs Socially Responsible?

11 Pages Posted: 29 Jan 2013

See all articles by Pornsit Jiraporn

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Pandej Chintrakarn

Mahidol University International College (MUIC)

Date Written: January 28, 2013

Abstract

“Lucky” CEOs are given stock option grants on days when the stock price is the lowest in the month of the grant, implying opportunistic timing, severe agency problems, and poor corporate governance (Bebchuk, Grinstein, Peyer, 2010). We find that lucky (opportunistic) CEOs invest significantly less in CSR. The evidence thus does not support the notion that CSR is primarily used to enhance managers’ private benefits at the expense of shareholders. Rather, lucky CEOs appear to view CSR investments as depriving them of the free cash flow they could otherwise exploit.

Keywords: corporate social responsibility, option backdating, CEO luck, agency theory, agency conflict, CSR

JEL Classification: G30

Suggested Citation

Jiraporn, Pornsit and Chintrakarn, Pandej, Corporate Social Responsibility (CSR) and CEO Luck: Are Lucky CEOs Socially Responsible? (January 28, 2013). Available at SSRN: https://ssrn.com/abstract=2208096 or http://dx.doi.org/10.2139/ssrn.2208096

Pornsit Jiraporn (Contact Author)

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

Pandej Chintrakarn

Mahidol University International College (MUIC) ( email )

999 Buddhamonthon 4 Road
Salaya, Nakhonpathom, 73170
Thailand
66 (0) 2441 5090 (Phone)
66 (0) 2441 9745 (Fax)

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