The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms

In this paper, we analyze the relationship between Chief Financial Officer (CFO) compensation and Corporate Sustainability (CS) by relying on stakeholder-agent theory and institutional theory. Taking a closer look at the German DAX30 and MDAX firms for the business years 2014–2018 (313 firm-year obs...

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Autores principales:	Mirko Profitlich, Yassin Denis Bouzzine, Rainer Lueg
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	corporate sustainability ESG CFO compensation long-term compensation corporate governance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/cc8a43a5f86d497bb4b93c45e0eb3911
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spelling	oai:doaj.org-article:cc8a43a5f86d497bb4b93c45e0eb39112021-11-11T19:50:45ZThe Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms10.3390/su1321122992071-1050https://doaj.org/article/cc8a43a5f86d497bb4b93c45e0eb39112021-11-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/12299https://doaj.org/toc/2071-1050In this paper, we analyze the relationship between Chief Financial Officer (CFO) compensation and Corporate Sustainability (CS) by relying on stakeholder-agent theory and institutional theory. Taking a closer look at the German DAX30 and MDAX firms for the business years 2014–2018 (313 firm-year observations), we perform regression and correlation analyses to determine if the different CFO compensation components are related to CS. Our analyses use the environmental, social, governance (ESG) performance as a proxy for CS, determined by the Asset Four database of Thomson Reuters and the CFO compensation data from the Beck et al. (2020) database, and reveal a positive relationship between CS and CFO compensation for pension and stock compensation. Based on our knowledge, this study is the first empirical study that takes a closer look at the relationship between the different CFO compensation components and CS for the German DAX30 and MDAX firms. This result comes with important implications concerning the design of CFO compensation and for future research.Mirko ProfitlichYassin Denis BouzzineRainer LuegMDPI AGarticlecorporate sustainabilityESGCFO compensationlong-term compensationcorporate governanceEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 12299, p 12299 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	corporate sustainability ESG CFO compensation long-term compensation corporate governance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	corporate sustainability ESG CFO compensation long-term compensation corporate governance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Mirko Profitlich Yassin Denis Bouzzine Rainer Lueg The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
description	In this paper, we analyze the relationship between Chief Financial Officer (CFO) compensation and Corporate Sustainability (CS) by relying on stakeholder-agent theory and institutional theory. Taking a closer look at the German DAX30 and MDAX firms for the business years 2014–2018 (313 firm-year observations), we perform regression and correlation analyses to determine if the different CFO compensation components are related to CS. Our analyses use the environmental, social, governance (ESG) performance as a proxy for CS, determined by the Asset Four database of Thomson Reuters and the CFO compensation data from the Beck et al. (2020) database, and reveal a positive relationship between CS and CFO compensation for pension and stock compensation. Based on our knowledge, this study is the first empirical study that takes a closer look at the relationship between the different CFO compensation components and CS for the German DAX30 and MDAX firms. This result comes with important implications concerning the design of CFO compensation and for future research.
format	article
author	Mirko Profitlich Yassin Denis Bouzzine Rainer Lueg
author_facet	Mirko Profitlich Yassin Denis Bouzzine Rainer Lueg
author_sort	Mirko Profitlich
title	The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
title_short	The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
title_full	The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
title_fullStr	The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
title_full_unstemmed	The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms
title_sort	relationship between cfo compensation and corporate sustainability: an empirical examination of german listed firms
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/cc8a43a5f86d497bb4b93c45e0eb3911
work_keys_str_mv	AT mirkoprofitlich therelationshipbetweencfocompensationandcorporatesustainabilityanempiricalexaminationofgermanlistedfirms AT yassindenisbouzzine therelationshipbetweencfocompensationandcorporatesustainabilityanempiricalexaminationofgermanlistedfirms AT rainerlueg therelationshipbetweencfocompensationandcorporatesustainabilityanempiricalexaminationofgermanlistedfirms AT mirkoprofitlich relationshipbetweencfocompensationandcorporatesustainabilityanempiricalexaminationofgermanlistedfirms AT yassindenisbouzzine relationshipbetweencfocompensationandcorporatesustainabilityanempiricalexaminationofgermanlistedfirms AT rainerlueg relationshipbetweencfocompensationandcorporatesustainabilityanempiricalexaminationofgermanlistedfirms
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The Relationship between CFO Compensation and Corporate Sustainability: An Empirical Examination of German Listed Firms

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