Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 23, 2019 erstellt
Beschreibung:
This paper analyzes the influence of stakeholder orientation on the design of managerial incentives. Our tests exploit the quasi-natural experiment provided by the staggered adoption of directors' duties laws (i.e., state-level laws that explicitly expand board members' duties to act in the best interests of all stakeholders). We find that the enactment of these laws results in a significant decrease in the sensitivity of CEO wealth to the stock price, or delta. The decrease in the delta of CEO compensation is more pronounced for firms with higher board independence and with stronger relationships with stakeholders. Our results suggest that the decrease in the sensitivity of CEO compensation to the stock price is an important channel used by boards to internalize stakeholder orientation