Abstract
Existing remuneration plans for CEOs still mainly focus on financial performance and do not
necessarily promote sustainable value creation for their firms. By way of reaction to this, a
growing number of academics and practitioners are acknowledging the need for the inclusion
of sustainability targets in executive remuneration. This study examines the current status of
the use of sustainability targets in executive remuneration specified by country, sector and
targets. Based on a sample of 490 listed firms from 11 countries and different sectors, the
use of targets related to sustainability in executive remuneration is assessed. The targets are
specified by kind of target (short term and long term) and content of target (environmental,
social or a combination of both). The results of this study show that (a) in 2010 on average
33% of the firms used sustainability targets in remuneration, (b) mainly the ‘dirty’ industries
use targets, (c) the targets used are mainly short-term targets and (d) they focus on social
issues.
Original language | English |
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Pages (from-to) | 390-401 |
Number of pages | 12 |
Journal | Business Strategy and the Environment |
Volume | 25 |
Issue number | 6 |
DOIs | |
Publication status | Published - 2016 |
Research programs
- EUR ESE 30
- EUR ESE 32