Unobservable CEO Characteristics and CEO Compensation as Correlated Determinants of CSP

Jingoo Kang

    Research output: Contribution to journalArticlepeer-review


    Do unobservable CEO characteristics predict corporate social performance (CSP) and are they significantly correlated with CEO compensation? How meaningful is stock-based CEO compensation as a predictor of CSP? To answer these questions, the author empirically examines the relationship between stock-based CEO compensation and CSP while accounting for unobservable CEO characteristics. This study finds that CEO fixed effects (CEO dummies) account for a significant variance in CSP and that these fixed effects are correlated with CEO compensation variables in a statistically significant manner. The findings suggest that unobservable CEO characteristics should be accounted for when examining the effect of CEO compensation variables on CSP. The findings also highlight the usefulness of stock-based compensation instruments for shareholders and other stakeholders who care about CSP and intend to promote CEO attention to social and ethical issues.

    Original languageEnglish (US)
    Pages (from-to)419-453
    Number of pages35
    JournalBusiness and Society
    Issue number3
    StatePublished - Mar 1 2017


    • CEO characteristics
    • CEO compensation
    • corporate social performance (CSP)
    • corporate social responsibility (CSR)
    • leadership

    ASJC Scopus subject areas

    • Business, Management and Accounting (miscellaneous)
    • Social Sciences (miscellaneous)


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