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Executive compensation indexed to corporate social responsibility and firm performance: Empirical evidence from France

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  • Khenissi, Mohamed
  • Hamrouni, Amal
  • Farhat, Nadia Ben

Abstract

This study examines the effect of introducing CSR criteria into CEO incentive compensation on the financial and extra-financial performance of French companies listed on the SBF 120 index. Based on panel data from 102 companies over a five-year period between 2014 and 2019, the empirical analysis shows that the inclusion of CSR criteria in compensation contracts improves environmental, societal and governance performance. However, the inclusion of these criteria has a negative impact on financial performance as measured by Tobin's q.

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  • Khenissi, Mohamed & Hamrouni, Amal & Farhat, Nadia Ben, 2022. "Executive compensation indexed to corporate social responsibility and firm performance: Empirical evidence from France," Finance Research Letters, Elsevier, vol. 50(C).
    • Handle: RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322004184
    DOI: 10.1016/j.frl.2022.103213
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