Executive Compensation Tied to ESG Performance: International Evidence

• 成果类型: Article
• 署名作者: Cohen, Shira; Kadach, Igor; Ormazabal, Gaizka; Reichelstein, Stefan
• 署名单位: California State University System; San Diego State University; University of Navarra; IESE Business School; University of Mannheim; Stanford University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12481
• 发表日期: 2023
• 页码: 805-853
• 关键词: corporate social-responsibility; governance; IMPACT

摘要

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 find that the adoption of ESG Pay is accompanied by improvements in key ESG outcomes, but not by improvements in financial performance.