RT Article
T1 The ethical dimension of equity incentives: a behavioral agency examination of executive compensation and pension funding
JF Journal of business ethics
VO 166
IS 3
SP 595
OP 610
A1 Martin, Geoffrey
A1 Wiseman, Robert M.
A1 Gomez-Mejia, Luis R. 1949-
A2 Wiseman, Robert M.
A2 Gomez-Mejia, Luis R. 1949-
LA English
YR 2020
UL https://ixtheo.de/Record/1734974095
AB We draw on the behavioral agency model to explore the ethical consequences of CEO equity incentives. We argue that CEOs are more concerned with funding pension plans when they have more to gain from their stock options yet will increasingly underfund employee pension funds as their current option wealth increases. Our findings reveal that both effects hold when the CEO has greater power (also occupying board chair) over firm decision making. Our study suggests that there is an ethical dimension to equity incentives, given they are intended to align CEO interests with shareholders, yet potentially incentivize CEO behaviors with adverse consequences for employees. Insights from our findings provide boards and regulators with behavioral levers to protect employee well-being in the context of pension funding.
K1 Behavioral agency
K1 Ethical decision making
K1 Executive Compensation
K1 Incentives
K1 Pension funding
K1 Stakeholder agency
K1 Aufsatz in Zeitschrift
DO 10.1007/s10551-019-04134-7