Search Results (41)

This study investigates the influence of corporate governance on reducing financial statement fraud (FSF) in Jordanian service and industrial companies listed on the Amman Stock Exchange from 2018 to 2022. To achieve this, the study employed the Beneish M-score model to assess the likelihood of FSF and logistic regression to examine the influence of corporate governance structure on fraud mitigation. The study identified 13 independent variables, including board size, board director’s independence, board director’s compensation, non-duality of CEO and chairman positions, board diversity, audit committee size, audit committee accounting background, number of annual audit committee meetings, external audit fees, board family business, the presence of women on the board of directors, firm size, and market listing on FSF. The study included 74 companies from both sectors—33 from the industrial sector and 41 from the service sector. Primary data was collected from financial statements and other information published in annual reports between 2018 and 2022. The results of the study revealed a total of 295 cases of fraud during the examined period. Out of the 59 companies analyzed, 21.4% demonstrated a low probability of fraud, while the remaining 78.6% (232 observations) showed a high probability of fraud. The results indicate that the following corporate governance factors significantly impact the mitigation of financial statement fraud (FSF): independent board directors, board diversity, audit committee accounting backgrounds, the number of audit committee meetings, family business involvement on the board, and firm characteristics. The study provides several recommendations, highlighting the importance for companies to diversify their boards of directors by incorporating different perspectives and experiences. Full article

As sustainability reporting and ESG disclosure gain global importance, understanding the factors influencing ESG outcomes becomes crucial for policymakers, investors, and corporate decision-makers. China, a major player in the global economy, has recently taken steps to align its stock exchanges with international ESG reporting standards. In this context, the study examines the individual and joint effects of digital transformation and CEO compensation on ESG performance, considering moderating factors such as firm size, state ownership, and CEO age and gender. The research employs a comprehensive dataset containing 16,205 firm-year observations from 2018 to 2022, combining financial data, ESG ratings, and a matrix of word frequencies related to digital transformation extracted from annual reports. The study adopts a firm-year two-way fixed effect model, utilizing panel data and control variables to address potential endogeneity concerns and unobserved firm heterogeneity. The findings provide evidence supporting the positive impact of digital transformation and CEO compensation on ESG performance. The level of digital transformation is positively associated with ESG performance. This relationship is stronger for larger firms and firms with older CEOs, while state-owned enterprises show mixed results compared to non-SOEs. However, the effect of CEO compensation and ESG performance is stronger for male CEOs. This study thus contributes to the growing literature on ESG performance, digital transformation, and executive compensation by providing insights into their relationships in the context of Chinese listed companies. Full article

This study explores the determinants of CEO compensation in the banking sector, focusing on cross-listing and loan growth. Using 8800 observations from 45 countries spanning 2004 to 2018, the analysis reveals significant differences in compensation structures between developed and developing economies. The findings show that CEO stock options and restricted stock compensation are positively correlated with cross-listing in the U.S. market, with a stronger effect in developing countries. Loan growth is associated with higher incentive-based pay but lower fixed salaries, aligning CEO compensation with performance-driven growth and risk management. These results underscore the role of regulatory environments and institutional quality in shaping executive pay, offering valuable insights for policymakers, financial institutions, and investors navigating a globalized banking sector. Full article

Polymer composite coatings exhibit excellent mechanical properties, chemical resistance, and self-lubricating characteristics, providing an effective solution to address the failure of transmission components under harsh operating conditions, including high-speed, high-pressure, and oil-deficient environments, which often lead to excessive friction and limited bearing performance. This study fabricated three polyamide-imide (PAI) composite coatings modified with monodisperse surface-modified nano-silica (SiO₂) via direct spraying and compared their physicochemical parameters. The tribological performance of the three coatings was evaluated using ring-block high-speed friction and wear tester under continuous loading conditions. The tests were conducted using diesel engine oil CI4-5W40, supplemented with oil-soluble cerium dioxide (CeO₂) nanoparticles as an energy-efficient and restorative additive, as the lubricating medium. The experimental results demonstrated that the PAI composite coating exhibited a load-bearing capacity exceeding 1000 N (66 MPa). The wear mechanism analysis reveals that CeO₂ nanoparticles embedded in the coating surface form a cobblestone-like protective layer. This unique microstructure compensates for the surface pits generated by PAI matrix transfer and minimizes direct contact between the coating and steel ring. Additionally, the synergistic interaction between short carbon fiber (SCF) and the tribofilm contributes to the exceptional tribological properties of the coating, including coefficients of friction as low as 0.04 and wear rates below 0.41 × 10⁻⁸ mm³/N·m. The experimental findings could provide an experimental and theoretical foundation for the application of coatings under conditions involving finished lubricants. Full article

Zirconolite is a wasteform that can immobilize Pu. Herein, zirconolites comprising Ce as a Pu simulant and Al as a charge compensator of Ce/Pu were synthesized by sintering raw CaO, ZrO₂, TiO₂, CeO₂, and Al₂O₃ powder mixtures at 1400 °C in static air. The reduction behavior and phase transformation of zirconolites during their heat treatment in an Ar–H₂ gas flow were investigated. In pure and Ce–Al co-doped zirconolite compositions, 2M-zirconolite and small amounts of perovskite were obtained after sintering. In contrast, 2M-, 4M-zirconolite and relatively large amounts of perovskite were obtained in Ce-doped zirconolite composition. All zirconolite compositions first underwent reduction at ~1050 °C by forming a small domain of perovskite phase. Ce–Al co-doped zirconolite showed a smaller fraction of phase transformation in perovskite than Ce-doped zirconolite, indicating the advantage of using a charge compensator to prevent perovskite formation. Full article

In this study, we focus on managerial incentives provided by debt-like compensation and further investigate whether and to what extent such managerial incentives may affect CEOs’ decisions on risk management. Building on cumulative prospect theory and instrumental stakeholder theory, we propose that CEOs tend to have risk-reduction incentives if they are paid with debt in their own firms, and that firm engagement in corporate social responsibility (CSR) activities can mediate the relationship between debt-like compensation and firm risk taking. In addition, we posit that the mediated relationship between CEO debt-like compensation and firm risk taking is contingent, and we propose environmental dynamism and munificence as two such contingencies that moderate the mediated process. Using a large longitudinal dataset of nonfinancial U.S. firms, we document strong supportive evidence for these hypotheses. Full article

This study explores the magnitude of shareholders’ say-on-pay (SOP) votes and its impact on CEO compensation. This study draws its sample from US Russell 3000 companies, the largest US companies, from 2011 to 2019. By creating a dummy variable, we further divided our sample into Russell 3000 and S&P 500 for peer comparison. This study employs descriptive statistics, correlation analysis, and pooled OLS regression and finds that CEO compensation has a significant negative association with pay gap opposition. The coefficient and t-statistic were greater for the S&P 500 than for the Russell group. The study also finds that the CEO-to-employee pay ratio (CTE) is positively correlated with the number of shareholders’ dissenting votes. The coefficient and t-statistic were greater for the Russell group than for the S&P 500 group. Each additional point of CTE increases shareholder dissent votes by 1.4% for the Russell 3000 companies. This study has important implications for corporate directors, investors, and policymakers. The study contributes to the corporate governance literature, particularly on executive compensation. Our findings support the perspective of social comparison theory and contend that shareholders view CEO compensation as a biased evaluation of their contribution to the firm. We have developed a unique measure of the CEO-to-employee pay ratio, which is based on SEC methodology. Our findings provide empirical evidence for investors and policymakers in the U.S. and other jurisdictions. Full article

This article examines how CEO compensation structure and CEO gender were associated with corporate social responsibility (CSR) performance in U.S. firms in the period between 2003 and 2013. Building on prior research in economics, finance, accounting, and management, which suggests gender differences in commitment to CSR, this study provides empirical evidence that female CEOs were positively associated with higher CSR performance. The analysis further shows that a higher proportion of equity in CEO compensation was positively associated with CSR, whereas higher proportions of cash bonuses and long-term incentive plans were negatively associated with CSR. Notably, a higher proportion of a cash bonus in CEO compensation further reduced CSR in firms led by female CEOs. These findings offer valuable insights for firms seeking to design executive compensation packages that align CEO behavior with the firms’ CSR objectives. This study contributes to the growing body of literature on CSR by providing empirical evidence on the role of CEO gender and compensation structure. Full article

Regulatory focus theory theorizes that there are two distinct dispositional foci of self-regulation (promotion focus and prevention focus) that impact individuals’ motivational tendencies to achieve their decision-making processes. This study integrates regulatory focus theory with upper echelons theory to investigate how CEO regulatory focus (i.e., higher degrees of promotion focus relative to prevention focus) influences corporate strategic outcomes, particularly regarding the pursuit of corporate social responsibility (CSR) performance and firm performance. This study uses data collected from the annual reports of S&P 1500 firms in the US from 2000 to 2018. Results show a negative association between CEOs who are predominantly promotion-focused and CSR performance. This negative association is diminished in firms with better corporate governance (i.e., higher CEO equity compensation and greater institutional ownership). The results also show that CSR plays a mediating role in the relationship between CEO regulatory focus and firm performance. These findings not only contribute to the existing literature by highlighting the role of CEO regulatory focus in shaping CSR initiatives but also shed light on its implications for firm performance. Full article

This paper investigates the association between board of director (BOD) structures and CEO equity-based compensation (long-term incentive) for commercial banks (conventional and Islamic banks) in MENA countries. Specifically, we take board size and board independence to measure the board structure. Furthermore, we investigate the influence of board structure on the association between CEO equity-based compensation and financial performance. Moreover, we compare conventional and Islamic banks in testing these relationships. Using a sample of 65 banks in MENA countries for the period between 2009 and 2020, we show a significant positive association between board size and CEO compensation. However, we find the same association between these variables for IBs, but the effect of board size on CEO compensation is less. We also show that board independence is negatively correlated with CEO compensation. Nevertheless, the relationship between board independence and CEO ownership is positive for IBs. For the moderating test, we find that effective board structure provides more incentives to the CEO, leading them to achieve higher financial performance. The Islamic bank’s business model (based on Shari’ah principles) contributes to the different influences of board structure on CEO compensation. Our results provide the insight that a strong and effective board is important for managing the executive’s compensation system. The findings of this study have implications for financial firms, policymakers, and regulators. Specifically, the study may help in understanding the benefits of different compensation structures relative to different types of financial firms. Full article

This study examines the relationship between CEO options compensation and corporate social responsibility (CSR) based on the behavioral agency model (BAM). The BAM assumes that the CEO is bounded by loss-aversion behavior. Using constructs from the BAM, i.e., CEO current and prospective wealth from their options compensation, this study examines the differing effects of CEO current wealth and prospective wealth on firms’ CSR strengths, CSR concerns, institutional CSR and technical CSR. Based on a sample of 1565 U.S. firms during 1996 to 2018, the study finds that CEO current wealth is negatively related to firms’ CSR strengths and CSR concerns. The study also finds that CEO prospective wealth is positively related to firms’ CSR strengths but is unrelated to CSR concerns. CEO current wealth is negatively related to institutional CSR, whereas CEO prospective wealth is positively related to institutional and technical CSR. CEO current (prospective) wealth is more strongly and negatively (positively) related to institutional CSR than technical CSR. This study indicates that designing CEO option compensation to align top managers’ interests with the stakeholder interests requires a greater understanding of how CEO bounded rationality behavior toward loss aversion and risk taking is influenced by their option compensation. Full article

Employee compensation is an often-neglected but essential part of corporate social responsibility which emphasizes caring for the needs of all stakeholders, including employees. In order to address pressure from stakeholders to strengthen prosocial acts, CEOs might prefer to raise employee compensation. However, other top executives are often reluctant to do so due to the concern that it reduces firm profits. In this paper, we propose that appointment-based CEO connectedness (ABCC) has a positive effect on employee compensation as it facilitates CEOs gaining support from the top management team to raise employee compensation. We employ multivariate linear regression as our research approach and find supportive evidence using data from Chinese listed firms during 2011–2020. Our results are robust to endogeneity concerns and survive an array of robustness checks. Heterogeneity tests show that this impact is stronger for firms facing less market competition and firms with low financial constraints. We further show that greater ABCC is associated with higher CSR scores of non-shareholders responsibility dimensions. Overall, our study suggests ABCC is conducive to the fulfillment of corporate social responsibility towards non-shareholders. Full article

This study aims to understand the impact of the additional remuneration of the Chief Executive Officer (CEO) over the mean remuneration of the board of directors on firms’ financial performance. The objective is to understand if the highest compensation of the CEO is a firm performance driver. In addition to the impact of total remuneration, the different remuneration components were split and analyzed. An unbalanced panel data of listed companies in DAX–Germany over the period from 2006 until 2019 is analyzed. Using dynamic methodology to estimate the models, the results show that higher additional remuneration positively explains higher firm performance measured using both accounting and market measures. The impact is also evident when additional remuneration components are analyzed. These results support the tournament theory, since when CEOs feel rewarded, they are more efficient in increasing the firm’s performance. Moreover, the firms’ financial characteristics, as well as macroeconomic factors, are also relevant to explaining its performance. Full article

In this study, we examined the association between CEO greed and corporate social responsibility (CSR) performance with a particular emphasis on the curtailing role of corporate governance. We found that CEO greed has a negative effect on CSR, since an uncontrolled pursuit of personal gain typically reveals myopic behavior and the foregoing of investment in CSR by a greedy CEO. Additionally, we found that CEO compensation in the form of large bonuses, support, and restricted stocks options weakened the link between CEO greed and CSR. Concerning the power dynamics amongst CEOs (CEO duality and tenure), we found that CEO duality moderates the negative relation between CEO greed and CSR. We also explored the curtailing role of corporate governance (proxies represented by board gender diversity and board independence) in the association between CEO greed and CSR. Our findings show that gender diversity curtails the negative effect of CEO greed on CSR once it reaches critical mass on the corporate board. Gender critical mass also curtails the negative impact of CEO greed on CSR, even if the CEO exercises duality. Our findings have empirical and practical implications. This study contributes to the existing literature by exploring the relationship between CEO greed and CSR in Asia, a region not renowned for CSR performance. This study also provides evidence for the curtailing role of compensation and governance factors in the negative relationship between CEO greed and CSR. Full article

This study examines the relationship between chief executive officers’ (CEOs’) characteristics (e.g., tenure, experience, education, age and compensation) and accounting conservatism for a sample of 672 yearly observations from both Jordanian industrial and service companies listed on the Amman Stock Exchange (ASE) during the period 2014–2021. Using feasible generalised least squares, the results show that CEOs with more experience and skills are positively and significantly related to accounting conservatism. Furthermore, consistent with upper-echelon-theory arguments, the findings reveal that CEO tenure is significantly and positively associated with the level of accounting conservatism. The results indicate that CEOs’ education, age and compensation are positively but insignificantly related to accounting conservatism. Overall, this study contributes to the literature by providing evidence of the importance of recognising the effects of CEOs’ characteristics on influencing accounting conservatism in Jordanian industrial and service companies. Full article