Seminar on Strategy & IB by Dr. Yi Tang (Sept 13, Wednesday)
posted by School of Business for HKU and Public
Event Type: Public Lecture/Forum/Seminar/Workshop/Conference/Symposium
Event Nature: Business & Economics
Strategy & IB Seminar
School of Business
Finding Justice: How Underpaid CEOs Respond to CSR
Dr. Yi Tang
Department of Management
School of Business
Hong Kong Baptist University
Do CEOs engage in activities addressing corporate social responsibility (CSR) for themselves or for others? On the one hand, CEOs may exploit CSR to pursue personal interests at the expense of shareholders; on the other hand, they may use CSR to promote the welfare of stakeholders and to obtain long-term competitive advantages for firms. This study tries to disentangle these two competing arguments in a unique context: when a CEO is significantly underpaid and perceives unfair treatment. According to equity theory, underpaid CEOs attempt to restore fairness by either improving their own benefits or reducing the benefits accrued to others. Therefore, with the aim of restoring fairness, underpaid CEOs may engage more heavily in CSR when the motive is self-serving but less when the motive is other-regarding. With a sample of CEOs of S&P 1500 firms for the 1996-2012 period, our results suggest that the self-serving motive dominates in the context of CEO underpayment. This effect is moderated by a set of factors at the individual, group, and community levels that either strengthen or weaken the mechanism of perceived fairness. Our results are robust to two difference-in-differences analyses - in the CEO succession context and in a quasi-natural experiment of limiting CEO compensation as a result of the Troubled Asset Relief Program (TARP). We discuss the implications of our findings for the CSR research and the CEO compensation literature.
|Venue||KK1236, 12/F., K.K. Leung Building, The University of Hong Kong|
Registration is not required.
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