Executive Compensation Tied to ESG Performance: International Evidence
San Diego State University · IESE Business School · +3 more institutions
Abstract
ABSTRACT Using a wide sample of international publicly traded firms, this paper studies the rapidly increasing practice of incorporating Environmental, Social, and Governance (ESG) metrics in executive compensation contracts. Our evidence suggests that this compensation practice varies at the country, industry, and firm levels in ways that are consistent with efficient incentive contracting. We also observe that reliance on ESG metrics in executive compensation arrangements is associated with engagement, voting, and trading by institutional investors, which suggests that firms could be adopting this practice to align their management's objectives with the preferences of certain shareholder groups. Finally, we…
Citation impact
- FWCI
- 150.91
- Percentile
- 100%
- References
- 53
Authors
4Topics & keywords
- Executive compensation
- Corporate governance
- Shareholder
- Business
- Compensation (psychology)
- Accounting
- Incentive
- Voting
Funding
- STSocial Trends Institute
- MDMinisterio de Ciencia, Innovación y UniversidadesAwards: PID2020, 10.13039/501100011033, 10.13039, 501100011033, 13039/501100011033
- DFDeutsche Forschungsgemeinschaft
- MDMinisterio de Ciencia e InnovaciónAwards: AEI / 10.13039/501100011033, 10.13039, 501100011033, PID2020, PID2020-, 10.13039/501100011033, 13039/501100011033
- AEAgencia Estatal de InvestigaciónAwards: 501100011033, 10.13039/501100011033, 13039, AEI / 10.13039/501100011033, 10.13039, 13039/501100011033