IDEAS home Printed from https://ideas.repec.org/a/wsi/jfmmix/v07y2019i01ns2282717x19400048.html
   My bibliography  Save this article

Sustainable Compensation And Performance: An Empirical Analysis Of European Banks

Author

Listed:
  • ELISABETTA D’APOLITO

    (Department of Economics, University of Foggia, Italy)

  • ANTONIA P. IANNUZZI

    (#x2020;Department of Economics, Management and Business Law, University of Bari, Italy)

  • STEFANIA SYLOS LABINI

    (Department of Economics, University of Foggia, Italy)

  • EDGARDO SICA

    (#x2021;Department of Communication and Social Research (CORIS), ‘La Sapienza’, University of Rome, Italy)

Abstract

This study investigates the financial and non-financial impacts of the use of sustainability criteria in banks’ executive compensation plans. The sample covers all the globally and systemically important European banks over the period 2013–2017. Panel data-fixed effect estimations are employed to mitigate endogeneity concerns and to control for within-firm dynamics. The implementation of sustainable criteria in the banks’ remuneration contracts was found to (i) negatively impact economic performance, (ii) negatively impact the riskiness profile, and (iii) positively impact sustainability performance. These findings have important implications for investors as well as banks. Indeed, these results are encouraging for the use of sustainability targets in executive compensation for restricting excessive risk-taking behaviors and improving sustainability performance.

Suggested Citation

  • Elisabetta D’Apolito & Antonia P. Iannuzzi & Stefania Sylos Labini & Edgardo Sica, 2019. "Sustainable Compensation And Performance: An Empirical Analysis Of European Banks," Journal of Financial Management, Markets and Institutions (JFMMI), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-30, June.
    • Handle: RePEc:wsi:jfmmix:v:07:y:2019:i:01:n:s2282717x19400048
    DOI: 10.1142/S2282717X19400048
    as

    Download full text from publisher

    File URL: https://www.worldscientific.com/doi/abs/10.1142/S2282717X19400048
    Download Restriction: Open Access
    File URL: https://libkey.io/10.1142/S2282717X19400048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Douglas A. Adu & Basil Al‐Najjar & Thitima Sitthipongpanich, 2022. "Executive compensation, environmental performance, and sustainable banking: The moderating effect of governance mechanisms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1439-1463, May.
    2. Patrick Velte, 2023. "Sustainable institutional investors and corporate biodiversity disclosure: Does sustainable board governance matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3063-3074, November.
    3. Simona Galletta & Sebastiano Mazzù & Valeria Naciti, 2021. "Banks' business strategy and environmental effectiveness: The monitoring role of the board of directors and the managerial incentives," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2656-2670, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:jfmmix:v:07:y:2019:i:01:n:s2282717x19400048. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: https://www.worldscientific.com/worldscinet/jfmmi .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.