executive compensation, sustainability, climate, environmental concerns, and company financial performance: evidence from indonesian commercial banks

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ID: 168182
2019
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Abstract
This research investigates whether executive compensation is designed to motivate managers to pursue corporate sustainability (CS) concerns as measured by Global Reporting Initiative (GRI) 3.1 disclosure indicators in Indonesian listed commercial banks throughout 2007–2014. In addition, this study examines the impact of executive compensation, climate, and environmental concerns on both financial health and market value performance as components of company financial performance (CFP). This study, based on an agency theoretic and stakeholder positions, focuses on banking entities in a developing country, and enriches the literature by examining topics through the application of the Throughput Model that captures different pathways and stages. The results suggest that higher executive compensation in Indonesian banking entities may motivate management to do more for climate and environmental concerns, as well as to enhance CFP. Contrary to expectations, climate and environmental concerns have a significant negative impact on both financial health and market value performance. This implies that Indonesian banking companies may tend to conduct corporate responsibility activities only for their own-sake as an altruism motive, which influences the reduction of firms’ financial performance. This study comes to the conclusion that CS concern depicts a weakening factor as well as a partial mediator in the relationship between executive compensation and financial health performance.
Reference Key
kartadjumena2019sustainabilityexecutive Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors ;Eriana Kartadjumena;Waymond Rodgers
Journal journal of physics: conference series
Year 2019
DOI
10.3390/su11061673
URL
https://www.mdpi.com/2071-1050/11/6/1673
Keywords Keywords not found

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