We explore the relationship between managerial incentives and environmental harm. We find that high-powered executive compensation packages can increase the odds of environmental law-breaking by 40-60% and the magnitude of environmental harm by over 100%. We document similar results for the setting of executive compensation and financial accounting misconduct. Finally, we outline some managerial and policy implications to blunt these adverse incentive effects.
|Original language||English (US)|
|Publisher||Social Science Research Network (SSRN)|
|Number of pages||49|
|State||Published - Apr 12 2016|