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A comparison of the association between corporate social responsibility and executive compensation: United States versus Canada

Research on Professional Responsibility and Ethics in Accounting

ISBN: 978-1-84950-722-6, eISBN: 978-1-84950-723-3

Publication date: 20 January 2010

Abstract

Prior research shows different associations between corporate social responsibility (CSR) and executive compensation in the United States versus Canada (i.e., McGuire et al., 2003; Mahoney & Thorne, 2006). It follows that these cross-national differences may be attributable to: (1) different compensation strategies; (2) other national differences; or (3) differences in the sampling and measurement techniques used in the respective studies. To gain insight into the factors underlying the cross-national differences, our study uses a single statistical approach on a U.S./Canada database to compare the association between CSR and executive compensation while controlling for size, industry, financial structure, and using common measures of salary, bonus and long-term compensation (LTC). We find that after controlling for size there are no differences in the association between executive compensation and CSR between the United States and Canada, and that LTC is positively associated with CSR in both countries. Thus, our findings suggest that previously reported differences in CSR between the United States and Canada are likely due to differences in the size of the firms used in the samples from the respective countries. Furthermore, our findings show the importance of the association between LTC and CSR for both the U.S. and the Canadian context. Implications of these findings are discussed.

Citation

Thorne, L., Mahoney, L.S. and Bobek, D. (2010), "A comparison of the association between corporate social responsibility and executive compensation: United States versus Canada", Jeffrey, C. (Ed.) Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 37-56. https://doi.org/10.1108/S1574-0765(2010)0000014006

Publisher

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Emerald Group Publishing Limited

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