CEO inside debt holdings and CSR activities

Abstract

This paper examines how CEO inside debt holdings affect firms' corporate social responsibility (CSR) activities. Using the US firm-level data over the 2006-2015 period, we find that firms with high CEO pensions and deferred compensation engage more in CSR. This positive relationship however is weakened for firms with greater CEO stock options. We further show that CEO inside debt holdings have a larger impact on CSR for firms in controversial industries where CSR is crucial for risk mitigation. Our results suggest that CEOs with higher inside debt holdings are less likely to take risks, thereby engaging in more CSR.