We document that corporate social responsibility (“CSR”) expenditures are not a form of corporate charity nor do they improve future financial performance. Rather, firms undertake CSR expenditures in the current period when they anticipate stronger future financial performance. We show that the causality of the positive association between CSR expenditures and future firm performance differs from what is claimed in the vast majority of the literature and that corporate accountability reporting is another channel through which outsiders may infer insiders’ private information about firms’ future financial prospects.

We examine the determinants and outcomes of Chief Executive Officers ( CEO s) accepting a $1 salary, a compensation practice that occurs relatively frequently in high‐profile firms and is debated by regulators, investors, and the media. Using a hand‐collected sample of 93 CEO s from 91 firms between 1993 and 2011, we examine the triggers preceding the $1 salary decision, the factors associated with the decision, subsequent stock returns, and the outcomes for the CEO s. Our evidence is consistent with two explanations for the phenomenon: (i) it is a gesture of sacrifice by CEO s of firms in crisis, and (ii) it is a signal of better future performance by CEO s of growing firms. Our analyses highlight the two different circumstances and shed light on an interesting debate that has thus far been supported only by anecdotal evidence.