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Does the introduction of CSR criteria into CEO incentive pay reduce their earnings management? The case of companies listed in the SBF 120

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  • Khenissi, Mohamed
  • Jahmane, Abderrahman
  • Hofaidhllaoui, Mahrane

Abstract

This study examines the effect of introducing CSR criteria into CEO incentive pay on earnings management practices in French firms listed on the SBF 120 index. Based on panel data for 106 companies over a five-year period between 2014 and 2019, the empirical analysis shows that the inclusion of CSR criteria in compensation contracts reduces the extent of earnings management (as measured by discretionary accruals and real earnings management).

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  • Khenissi, Mohamed & Jahmane, Abderrahman & Hofaidhllaoui, Mahrane, 2022. "Does the introduction of CSR criteria into CEO incentive pay reduce their earnings management? The case of companies listed in the SBF 120," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001659
    DOI: 10.1016/j.frl.2022.102880
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    2. Patrick Velte, 2024. "Archival research on sustainability‐related executive compensation. A literature review of the status quo and future improvements," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3119-3147, July.
    3. Gao, Yihong & Pan, Xingyu & Ye, Qiaoyan, 2023. "Corporate governance effects of state asset protection: A perspective on real earnings management," Finance Research Letters, Elsevier, vol. 58(PD).
    4. Mohamed Khenissi & Amal Hamrouni & Nadia Ben Farhat Toumi, 2022. "Executive compensation indexed to corporate social responsibility and firm performance: empirical evidence from France," Post-Print hal-03771680, HAL.

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