Impact of pay disparities between chief executive officers and chief financial officers on corporate financial and investment policies

IF 9.4 3区管理学 Q1 BUSINESS, FINANCE

Journal of International Financial Management & Accounting Pub Date : 2021-11-12 DOI:10.1111/jifm.12142

Feng Han, Xin Che, Enya He

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引用次数: 2

Abstract

We study whether and how pay disparities between chief executive officers (CEOs) and chief financial officers (CFOs) affect corporate policies. Consistent with the tournament theory, we find a positive association between the CEO–CFO pay disparity and aggressiveness in corporate financial and investment policies. Specifically, a firm with a large CEO–CFO pay disparity tends to have an aggressive capital structure and tilt toward high-risk investments. Furthermore, we test the impact of the CEO–CFO pay disparity on firm value and show that the pay disparity is positively associated with firm value. Overall, we conclude that CEO–CFO pay disparities provide CFOs with tournament incentives to not only adopt aggressive corporate policies but also select better investment projects. Our research highlights the career-enhancing and value-creating effects of CEO–CFO pay disparities as well as the important role of CFOs’ incentives on the treasurer side of their duties.

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首席执行官和首席财务官之间的薪酬差距对公司财务和投资政策的影响

我们研究首席执行官(ceo)和首席财务官(cfo)之间的薪酬差异是否以及如何影响公司政策。与竞赛理论一致，我们发现CEO-CFO薪酬差异与企业财务和投资政策的侵略性之间存在正相关。具体来说，首席执行官和首席财务官薪酬差距较大的公司往往具有激进的资本结构，并倾向于高风险投资。进一步，我们检验了CEO-CFO薪酬差异对企业价值的影响，发现薪酬差异与企业价值呈正相关。总体而言，我们得出的结论是，首席执行官与首席财务官的薪酬差异为首席财务官提供了比赛激励，不仅采取积极的公司政策，而且选择更好的投资项目。我们的研究强调了首席财务官与首席财务官薪酬差异对职业发展和价值创造的影响，以及首席财务官激励在财务主管职责方面的重要作用。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Financial Management & Accounting BUSINESS, FINANCE-

CiteScore

9.10

自引率

2.00%

发文量

期刊介绍： The Journal of International Financial Management & Accounting publishes original research dealing with international aspects of financial management and reporting, banking and financial services, auditing and taxation. Providing a forum for the interaction of ideas from both academics and practitioners, the JIFMA keeps you up-to-date with new developments and emerging trends.