Research Spotlight: Corporate Diversity & Inclusion and Executive Compensation

Within the School of Business & Management, a student-faculty research team is studying the effects of linking executive pay to DEI initiatives to answer the question: when it comes to increasing diversity, equity and inclusion in corporations, does money talk?

During summer 2021, Assistant Professor of Management Dr. Kelly Basile and management major Ryan Arisian ’24 began developing a database of S&P 500 companies which includes information on DEI targets as a part of executive compensation, DEI metrics (employee diversity, board diversity and managerial diversity) and firm performance. Do corporations who tie executive compensation to DEI targets perform better on DEI outcomes and overall, have better firm performance?

With movements such as Black Lives Matter and #MeToo shining a light on systemic inequalities, corporate stakeholders are looking for organizations to commit to actionable plans to increase diversity, equity and inclusion (DEI) initiatives. Prior research has found that that linking executive compensation to corporate social performance targets has been effective in holding leaders accountable for initiatives relating to corporate social responsibility.