||Do CEO characteristics and compensation structure influence firms' eco-efficiency performance?
||Graduate Institute of Finance
Corporate Social Responsibility (CSR)
This thesis examines how CEO’s characteristics and their compensation structure affect their firms’ eco-efficiency performance. Among the many scopes CSR involves, we only focus on the environmental scope and use eco-efficiency as a proxy variable of firms’ environmental performance. The sample consists of 205 U.S. firms during the period from 1992 to 2012, which accounts to 1,835 firm-year observations. We find that are that younger or female CEOs performance tend to show better eco-efficiency. Furthermore, the compensation disparity between CEOs and top executives has a significant negative relation with eco-efficiency, while CEOs’ equity-based compensation shows a significant positive effect on eco-efficiency. We also identify the global financial crisis did have influence on firm’s performance of eco-efficiency. The results of thesis might provide implications for firms on their board member structure and compensation scheme for their CEOs.
1. INTRODUCTION 1
2. LITERATURE REVIEW 5
2.1 Eco-efficiency 5
2.2 CEO characteristics and environmental performance 8
2.3 Compensation structure and environmental performance 10
2.4 Firm characteristics and environmental performance 13
2.5 Financial crisis and environmental performance 14
3. DATA AND METHODOLOGY 17
3.1 Measures of eco-efficiency 17
3.2 Measures of CEO characteristics 18
3.3 Methodology and data 19
3.4 Summary of hypotheses 22
4. EMPIRICAL ANALYSIS 24
4.1 Primary results 24
4.2 Robustness tests 28
4.2.1 Environmentally sensitive industries 28
4.2.2 CEO gender-changed firms 29
5. CONCLUSIONS 30
APPENDIX A: CSR pyramid and A. H. Maslow’s example 39
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