The Social Dynamics of Executive Perks: Fostering Innovation Through Stewardship

ABSTRACT This paper, drawing on stewardship theory, explores how executive perks serve as nonmonetary incentives to drive corporate innovation, particularly by enhancing social dynamics. By positioning perks as role‐based incentives that foster intrinsic motivation, this study reveals their potential to reduce managerial myopia and encourage risk‐taking innovation activities. We show that this effect is not simply a result of confidence sentiment from perks and is more pronounced in firms with higher agency costs. Furthermore, while perks enhance innovation efforts and outcomes, they may also reduce innovation efficiency, highlighting a trade‐off between motivation and resource allocation in executive compensation design.