Government Say-on-Pay, Social Capital and Corporate Social Responsibility Performance: Evidence from China

Jiang, Haiyan; Hu, Yuanyuan; Su, Kun; Zhu, Yanhui

Abstract

In the backdrop of a serial of regulations issued by the Chinese government in an effort to rein in top executives’ compensation in the state-owned enterprises, this study finds that the pay restriction on top executives adversely affects the CSR performance, and this effect is more pronounced in regions with a high level of social capital, and in firms with a male CEO or a high percentage of male top-executives. The result suggests that in a society with high social capital, the pay restriction imposed by the government has greatly distorted the incentives of managers who used to be rewarded for their engagement in CSR as a signalling mechanism to meet the social expectation. Additional tests show that CSR reporting assurance mitigates the negative effect of pay restriction on CSR performance to some extent, but the negative effect of pay restriction is more pronounced in regions with a high level of government intervention.

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: 2019 American Accounting Association (AAA) Annual Meeting
• Start Date: Aug 10, 2019
• End Date: Aug 14, 2019
• Deposit Date: Jun 11, 2020
• Keywords: Executive Compensation; CSR performance; Social Capital; Gender; China
• Public URL: https://uwe-repository.worktribe.com/output/6018314