Executive compensation tied to ESG performance: International evidence

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CKOR 2022 JAR Conference Paper.pdf - Veröffentlichte Version
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URN:	urn:nbn:de:bsz:180-madoc-622797
Dokumenttyp:	Arbeitspapier
Erscheinungsjahr:	2022
Ort der Veröffentlichung:	Mannheim
Auflage:	April 2022
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Fakultät für Betriebswirtschaftslehre > Stiftungsprofessur für ABWL (Reichelstein 2018-)
Fachgebiet:	330 Wirtschaft
Abstract:	This paper examines the use of ESG performance metrics in executive compensation contracts. We first document that a growing fraction of publicly traded companies around the world now incorporate ESG metrics in the compensation schemes of their top executives. Our analysis links the reliance on these metrics to firm fundamentals, the geographic location of firms as well as the influence of institutional shareholders. Our findings also suggest that the adoption of ESG variables in managerial performance measures is accompanied by improvements in ESG performance and meaningful changes in the compensation of executives.