Conference Programme
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available). Note that the schedule is subject to changes.
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Daily Overview |
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Parallel Session 06: Politics, Policy, and Shareholder Pressure Location: Seminar Room 7 (Level 2) Session Chair: Witold Henisz, The Wharton School, University of Pennsylvania | |
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Environmental and Social Goals in CEO Pay and Shareholder Activism Singapore Management University, Singapore This paper examines the association between firms' adoption of environmental and social (ES) performance goals in CEO pay (ES pay) and ES-related shareholder activism. I argue that ES pay serves as an information cue when activist shareholders screen companies’ ES intent and quality. Specifically, firms face a lower likelihood of being targeted by ES shareholder proposals following the adoption of ES pay. This negative association exists when firms adopt objective ES goals in CEO pay, but does not exist when firms adopt subjective ES goals. Such a screening effect is stronger when firms' industry peers experience high levels of ES controversies. Empirical analysis of S&P 1,500 firms from 2007 to 2021 supports the hypotheses. In addition, shareholders are more likely to withdraw proposals if firms have ES pay. These findings suggest that ES pay strengthens the alignment of shareholder interests and managerial incentives concerning ES issues. Overall, this study contributes to the literature on environmental, social, and governance (ESG), executive compensation, and shareholder activism. | |