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This study aims to investigate the question concerning whether tournament incentives motivate chief executive officers (CEOs) to be socially responsible.

Data from all A-share Chinese companies listed on the Shanghai and Shenzhen stock exchanges for the period from 2010 to 2015 are used. To draw inferences from the data, ordinary least squares (OLS) regression and cluster OLS are used as a baseline methodology. To control for the possible issue of endogeneity, firm-fixed-effects regression, two-stage least squares regression and propensity score matching are used.

A reliable evidence is found that tournament incentives motivate CEOs to be more socially responsible. Additional analysis reveals that the positive effect of CEO tournament incentives on corporate social responsibility performance (CSRP) is more pronounced in state-owned firms than it is in non-state-owned firms. The study’s findings are consistent with tournament theory and the conventional wisdom hypothesis, which proposes that better incentives lead to competitiveness, which improves financial and social performance.

The study’s findings have implications for companies and regulators who wish to enhance CSRP by giving tournament incentives to top managers. Investment in social responsibility may reduce the conflict between executives and employees and improve the corporate culture.

This study contributes to the existing literature by providing the first evidence that CEOs’ tournament incentives play a vital role in CSRP. The study’s findings contribute to tournament theory.

This paper investigates the influence of tournament incentives, measured by Chief Executive Officer (CEO) pay slice (CPS), on the acquisition decisions of Australian firms.

This study applies ordinary least squares regression analyses to a sample of 1,429 acquisition observations announced by 986 unique Australian firms spanning the 2001–2015 period. Event study methodology was employed to capture the market reaction to acquisition announcements. Multinomial logit models, a two-stage least squares instrumental variable (IV) approach and propensity score matching (PSM) technique were performed for robustness and endogeneity correction purposes.

The results suggest that CPS has a positive and significant relationship with the announcement period abnormal return realised by acquirers, implying that executives are motivated to exert best efforts and support the CEO in making value-creating acquisitions. Further analyses reveal that management teams of high CPS firms demonstrate efficiencies in executing acquisitions. The positive relationship between the CPS and abnormal return is more pronounced in acquisitions of private targets, domestic targets and bidders with high-quality CEOs. These acquisitions make a significant contribution to the long-run performance of the firm, which provides support for the effort inducement hypothesis.

The study's empirical evidence implies that the strong governance environment in Australia and a highly monitored acquisition market and compensation contracts motivates executives to exert their efforts to make value-enhancing acquisitions.

This paper appears to be the first investigation that makes a link between CPS in different components (i.e. short-term, long-term and total pay) as proxy for tournament incentives and the outcomes of both public and non-public acquisitions in the Australian setting.

This paper aims to examine the relationship between executive pay disparity and the cost of debt.

The authors use a sample of syndicated bank loans granted to United States (US) listed firms from 1992 to 2014 and adopt the loan yield spread (Chief Executive Officer (CEO) pay slice) as the main proxy for the cost of debt (executive pay disparity). The authors also use the Heckman two-stage model to address the sample selection bias and the two-stage least squares and propensity score matching methods to control the potential endogeneity issues. To test different views about executive pay disparity, the authors adopt the cash-to-stock ratio to proxy for managerial risk-shifting incentives.

The authors find that the cost of debt is significantly higher for firms with larger executive pay disparity, which is robust to sample selection bias, endogeneity concerns, alternative measures and various controls. This positive relationship increases with the risk-shifting incentives of CEOs instead of other top executives, which supports the managerial power view, and is stronger for firms with higher levels of financial distress. The findings suggest that creditors view executive pay disparity are associated with higher credit risk and CEO entrenchment.

This paper reveals one “dark” side of executive pay disparity: it increases the cost of debt and identifies a significant role played by CEOs' risk-shifting incentives. The authors provide direct evidence of the relevance of pay differential to corporate credit analysis.

The world economy has experienced several economic downturns, and each phase emphasised that no industry is immune to inappropriate risk-management practices. Against the backdrop of the recent COVID-19 pandemic, which had far more effects than a financial crisis, the existing paper reviewed the state of current research in the realm of corporate governance and risk-management practices.

This study rigorously followed a systematic approach in identifying, selecting and critically synthesising the existing literature on corporate governance and risk management. The review was carried out on the Web of Science and Scopus database until December 31, 2022. In total, 72 research works were examined and reviewed.

This systematic literature review showed that companies with strong governance mechanisms are less exposed to corporate risks. Several attributes, such as higher institutional ownership stakes, concentrated family ownership structures, lower CEO compensation and duality, higher presence of females in the management, better board dynamics in terms of independent boards and gender diversity are all strong mechanisms for mitigating risk. Additionally, socially responsible companies are better positioned to mitigate corporate risks. Furthermore, several themes emphasising the governance risk link have been identified to understand this domain further.

By analysing and synthesising existing corporate governance and risk-management themes, this study ascertained various research gaps that can be addressed in future studies. Furthermore, drawing on this paper's essential cues, researchers can significantly differentiate their work from existing ones in the field.

The present study investigates the impact of accounting comparability on chief executive officer (CEO) incentive plans and the moderating role of board independence for companies listed in Tehran Stock Exchange (TSE).

The information about 177 companies in 2014–2021 was examined. In this study, equity-based compensation and cash-based compensation were used as the CEO incentive plans. The equity-based compensation was calculated through the ownership of the CEO shares.

The results suggest that the higher accounting comparability increases not only CEO equity-based compensation, but also cash-based compensation. Board independence also strengthens the relationship between accounting comparability and CEO compensation. Hypothesis testing based on robustness checks confirmed these results.

The paper is pioneering, to the authors' knowledge, in identifying how board independence moderates the impact of accounting comparability on CEO compensation. The findings provide insights into economic consequences to the firm related to accounting comparability and board monitoring. The results have important practical implications for international investors to evaluate accounting comparability, corporate governance mechanisms and CEO incentives.

This study aims to examine the effects of local tournament incentives on environmental, social and governance (ESG) disclosure and the quality of such disclosures among Chinese A-share listed companies. Furthermore, it seeks to investigate the moderating roles of CEO duality, institutional investors’ shareholding and product market competition in this relationship.

This study uses a quantitative approach, and data from A-share listed companies in China spanning from 2012 to 2021. To test the proposed hypotheses, the authors conduct hierarchical regression analysis along with a series of robustness tests to ensure the validity of our findings.

The findings of this study indicate that local tournament incentives have a positive impact on companies’ propensity to disclose ESG information, yet they negatively influence the quality of these disclosures. Additionally, the presence of CEO duality and product market competition attenuate this relationship, whereas the shareholding of institutional investors serves to strengthen it.

This study’s findings can aid policymakers and regulators in China and other emerging economies in policies that promote high-quality ESG information disclosure, taking into account local tournament incentives. Furthermore, the study underscores the importance of maintaining robust corporate governance structures within firms to ensure that CEOs’ self-serving motivations do not undermine ESG disclosure.

This study adds to the ongoing discourse on the significance of ESG disclosure in emerging economies by analyzing the influence of executive promotion incentives on ESG disclosure from an external labor market standpoint. By exploring the potential self-serving motivations of CEOs in promoting ESG values and practices within organizations, this paper addresses a gap in the existing literature.

This study aims to investigate whether integrating environmental, social and governance (ESG) practices mediates the relationship between executive incentive compensation and the financial performance of Islamic and conventional banks in the Middle East and North Africa (MENA) region.

This study used multiple regression models to analyze the effectiveness of ESG practices as a mediating variable in explaining the relationship between executive incentive compensation and banks’ financial performance between 2015 and 2021. The sample consisted of 57 Islamic and conventional banks operating in the MENA region, and the data were collected from the Thomson Reuters database (Data Stream).

This research paper showed the positive and significant mediating effect of the ESG practice on Banks’ financial performance. Thus, banks’ financial and stock market profitability is influenced by ESG information disclosure. This finding shows that taking ESG into account improves the relationship between executive incentive compensation and banks’ financial performance.

The results may interest academic researchers, regulators and policymakers and would support stakeholders and decision-makers who wish to discover how executive incentive compensation affects financial performance in banks.

This study contributes to previous literature by studying the mediating effect of ESG practices on the relationship between executive incentive compensation and banks’ financial performance. Indeed, the originality of this research paper is justified by the scarcity of studies and, to the best of the authors’ knowledge, constitutes one of the first attempts to examine this relationship via a mediating variable, i.e. ESG.

In this paper, we review the literature on pay variation (e.g., pay dispersion, pay compression, pay range) in organizations. Pay variation research has increased markedly in the past two decades and much progress has been made in terms of understanding its consequences for individual, team, and organizational outcomes. Our review of this research exposes several levels-related assumptions that have limited theoretical and empirical progress. We isolate the issues that deserve attention, develop an illustrative multilevel model, and offer a number of testable propositions to guide future research on pay structures.

Using new survey data for Bulgarian executives during 1989‐1992, presents some of the first evidence on the nature of managerial labour markets for a country in transition. Finds that internal labour markets for managers are quite underdeveloped, suggesting insufficient firm‐specific human capital accumulation by managers, weak incentive effects of promotion tournaments, and an inability to use promotions as a job assignment mechanism; the use of incentive pay schemes (as compared to traditional fixed wage payments) is limited and is declining; and internal wage structures are relatively flat, leading to weak incentive effects for all contenders in the CEO promotional tournament and to an inability to ensure that the most able contenders will win. All these findings point to potentially serious inefficiencies and thus to serious public policy concerns. There exists an urgent need for a strategy to promote internal labour markets for managers, which would include both incentive pay systems for managers and steeper internal wage structures.

The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members.

Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity.

The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity.

The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members.

This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components.