LAUSR.org creates dashboard-style pages of related content for over 1.5 million academic articles. Sign Up to like articles & get recommendations!

Management Financial Incentives and Firm Performance in a Sustainable Development Framework: Empirical Evidence from European Companies

Photo by adeolueletu from unsplash

Management financial incentives are an effective way to attract, retain and stimulate managers with beneficial spillover effects on firm performance. This paper explores the relationship between board and executive management… Click to show full abstract

Management financial incentives are an effective way to attract, retain and stimulate managers with beneficial spillover effects on firm performance. This paper explores the relationship between board and executive management compensation and remunerations and the financial performance of European companies from various industries in a sustainable development framework. The sample covers 1594 firms with data extracted from Thomson Reuters Eikon (Refinitiv, New York, NY, USA) databases from 2019 and a selection of specific indicators. The complex methodological endeavor encompassed by our research embeds several robust and two-stage least squares (2SLS/IV) regression models, structural equation modelling, including latent class analysis and network analysis through Gaussian Graphical Models. Main results bring to the fore that management financial incentives/packages reverberate positively and significantly on the performance of European firms, leading to important upwards in enterprise value and company earnings. Moreover, the sustainability indicators (committee, policy, energy use, renewable energies) also have positive effects on the financial performance of analyzed companies, being discussed extensively within the paper.

Keywords: management financial; european companies; management; financial incentives; firm performance; performance

Journal Title: Sustainability
Year Published: 2020

Link to full text (if available)


Share on Social Media:                               Sign Up to like & get
recommendations!

Related content

More Information              News              Social Media              Video              Recommended



                Click one of the above tabs to view related content.