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This paper examines whether climate risk is associated with excess executive perquisites (perks) among Chinese listed firms over the period 2014–2022. Using a city-level climate risk index based on disaster-related fatalities and economic losses, we find that firms exposed to greater climate risk tend to exhibit higher excess executive perks. This positive association is weaker for firms with greater media coverage and stronger digital technology application. The results remain robust to a range of additional analyses, including alternative climate-risk and perk measures, propensity score matching, first-difference specifications, confounder tests, and Fama – MacBeth regressions. Overall, the paper contributes to the literature on the governance consequences of climate risk by showing that climate-related pressure is associated with greater implicit executive consumption and that stronger external scrutiny and governance-related discipline may mitigate this relation.
Li et al. (Wed,) studied this question.