EXECUTIVE COMPENSATION, CORPORATE SUSTAINABILITY CONCERNS AND COMPANY FINANCIAL PERFORMANCE IN INDONESIAN COMMERCIAL BANKING
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This research explores the potential influence of executive compensation on corporate sustainability concerns and company financial performance. Interestingly, by investigating the pay-for-performance relationship, this study finds that executive compensation has a direct significant positive impact on corporate sustainability concerns and both company financial health and market value performance. Meanwhile, by adopting a shareholder perspective, this study reveals that higher executive compensation can encourage managers to adopt more corporate sustainability concerns for the shareholders' and/or managers' benefits; however, this will reduce the firm's value. Moreover, a counter-balance mechanism occurs when employs the stakeholders' perspective is employed. High executive compensation motivates managers to implement more corporate sustainability concerns to serve all stakeholders’ interests, which may to increase the firm's market value through company financial health.
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