Journal of Business Ethics

, Volume 151, Issue 2, pp 295–317 | Cite as

Linking Societal Trust and CEO Compensation

  • Kiridaran Kanagaretnam
  • Abdul-Rahman Khokhar
  • Amin Mawani


We examine the association between societal trust and the levels of CEO compensation and the proportion of equity-based compensation of 897 firm-years from 18 countries over the 2007–2013 period. We find both the levels of CEO compensation as well as the proportion of equity-based compensation to be lower in countries with higher levels of societal trust. This suggests that costly regulations on CEO compensation may not be as necessary in jurisdictions with higher levels of societal trust. We also examine the association between pay disparity and societal trust. Consistent with our finding of lower pay at the CEO rank, we find pay disparities are lower in countries with higher levels of societal trust.


Trust CEO pay Culture Income disparity 



Funding from the Social Sciences and Humanities Research Council (SSHRC) of Canada is gratefully acknowledged.


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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  • Kiridaran Kanagaretnam
    • 1
  • Abdul-Rahman Khokhar
    • 2
  • Amin Mawani
    • 1
  1. 1.Schulich School of BusinessYork UniversityTorontoCanada
  2. 2.Sobey’s School of BusinessSaint Mary’s UniversityHalifaxCanada

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