What is it about?
This study aims to verify whether managers’ overpayment supports the interest alignment hypothesis or whether they support the managerial entrenchment hypothesis. Furthermore, I tried to clarify the results by confirming that these relationships are weakened by the family businesses whose ownership and management are in agreement.
Featured Image
Why is it important?
First, there is a significant positive relationship between managerial overpayment and CSR performance measures. The results are interpreted that managers try to fulfill their social responsibilities when they are compensated above normal level, supporting the interest alignment hypothesis. Furthermore, the significant positive relationship between managerial compensation and CSR performance is not moderated by family firms. These results show that the positive relationship between managerial overpayment and CSR performance is weakened in the family business, supporting the interest alignment hypothesis.
Perspectives
This study shows that managers’ overpayment ultimately serves as a catalyst to strengthen social responsibility, suggesting that the compensation system can act as a safeguard to mitigate agency problems between company and external stakeholders.
Professor Bumjin Park
Soonchunhyang University
Read the Original
This page is a summary of: The Effect of Managers’ Excessive Compensation on CSR Performance: Focusing on the Moderating Effects of Family－owned Companies, Korean Business Education Review, June 2017, Korea Association of Business Education,
DOI: 10.23839/kabe.2017.32.3.93.
You can read the full text:
Contributors
The following have contributed to this page
