The impact of CEO narcissism on voluntary Say-On-Pay votes in terms of CSR performance in Germany

Abstract

On the occasion of the current legislative process on Say-on-Pay (SOP) and the growing discontent among the population due to the constant increase in the remuneration of the management board, this study examines whether a narcissistic Chief Executive Officer (CEO) influences shareholders voting behavior. In this context, 93 firm-year observations of German non-financial corporations in the period from 2009 to 2017 are analyzed. On the basis of extensive literature analysis and the inclusion of different theories, it is assumed that the relationship between CEO narcissism and SOP approvals shows an inverted U-shaped association. In addition, it is tested whether this relationship is significantly different between firms with good and bad CSR performance. The results of the quadratic research model show that there is no significant relationship between CEO narcissism and SOP approvals. There are also no significant differences between firms with good and bad CSR performance. The reasons for this insignificance are manifold. Nevertheless, this study contributes to the heterogeneity of the scientific literature by being the first to test the relationship between CEO narcissism and SOP approvals for German firms on the basis of a non-linear research model while also taking the impact of CSR performance into account.