Volume 56, Issue 1 p. 85-108
ORIGINAL ARTICLE

Charitable inclination and the chief executive officer's pay package

Dev R. Mishra

Corresponding Author

Dev R. Mishra

Edwards School of Business, University of Saskatchewan, Saskatoon, Canada

Correspondence

Dev R. Mishra, Edwards School of Business, University of Saskatchewan, 25 Campus Drive, Saskatoon, SK S7N5A7, Canada.

Email: Mishra@edwards.usask.ca

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First published: 09 August 2020
Citations: 3

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.

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