Does Disclosing CEO Compensation lead to Revealing Risk: An Empirical Investigation into Executive Compensation and ESG- Related Litigation" Evidence from US listed Firms.

  1. Anil Kumar Pandey
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Abstract

This study examines how litigations, including that related to Environmental, Social, and Governance (ESG) concerns, shape the volume, clarity, and complexity of executive compensation disclosure. Specifically, I investigate whether litigation prompts managers to obfuscate their executive compensation disclosures or use clearer, more precise language. I distinguish between general and ESG-related litigation and explore their effects at both firm and industry levels. I employ baseline OLS models and industry-year and firm-year fixed effects to isolate the impact of different types of litigation on various dimensions of disclosures over time, using a sample of S&P 500 firms from 2014 to 2024. Overall, our findings suggest that while litigation may influence disclosure practices in the cross-section, it does not appear to drive within-firm or industry-level changes over time. Robustness tests yielded similar results. JEL Codes: G34, G38, K22, K32, M14

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  1. Version published to 10.21203/rs.3.rs-8887777/v1 on Research Square