Charitable Inclination and the Chief Executive Officer’s Pay Package

The Financial Review, Forthcoming

Posted: 19 Jan 2021

See all articles by Dev R. Mishra

Dev R. Mishra

University of Saskatchewan - Edwards School of Business

Date Written: June 12, 2020

Abstract

Using chief executive officers’ (CEOs’) lifetime nonemployment experience in prominent charitable organizations to create a proxy for CEO charitable inclination, I find that charitably inclined CEOs receive a significant pay premium. The pay premium sensitivity to CEO charitable inclination is particularly pronounced for male, external, and specialist CEOs who are employed at firms that are undiversified, larger, less debt reliant, poor performing, facing high product-market competition, and that keep nonmanipulative financial statements and demonstrate high inclination to social responsibility in the area of diversity, employee relations, and internal governance. This research contributes to the broader debate on labor market pricing of CEO characteristics.

Keywords: CEO Pay, Charitable Inclination, Nonemployment Experience, Corporate Social Responsibility

JEL Classification: G3, M1, Z

Suggested Citation

Mishra, Dev R., Charitable Inclination and the Chief Executive Officer’s Pay Package (June 12, 2020). The Financial Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3745332

Dev R. Mishra (Contact Author)

University of Saskatchewan - Edwards School of Business ( email )

Edwards School of Business
Saskatoon, Saskatchewan S7N 5A7
Canada
306-966-8457 (Phone)
306-966-2515 (Fax)

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