Sustainability Targets in Executive Remuneration: Targets, Time Frame, Country and Sector Specification

Maas, Karen; Rosendaal, Sanne

doi:10.1002/bse.1880

Cited by 63 publications

(69 citation statements)

References 75 publications

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“…Our results support the argument that the existence of sustainability committees helps to assess executive performance on duties related to sustainability issues (Berrone and Gomez-Mejia 2009a). They are also consistent with the view that independent external assurance of sustainability reports is more likely to provide controllability of sustainability-related targets and enhance the credibility of sustainable performance (Maas and Rosendaal 2016;Berrone and Gomez-Mejia 2009b).…”

Section: Descriptive Statisticssupporting

confidence: 89%

“…Kolk and Perego 2014) or in international settings (e.g. Francoeur et al 2017;Maas and Rosendaal 2016). The results of exiting studies are mixed.…”

Section: Executive Compensation and Social Performancementioning

confidence: 99%

“…Maas (2015) argues that companies can use incentives by integrating corporate social performance targets into executive compensation. Maas and Rosendaal (2016) examine the inclusion of sustainability targets in executive compensation using 490 listed companies from 11 countries and find companies use sustainability targets that focus on social issues in their remuneration plans.…”

Section: Executive Compensation and Social Performancementioning

confidence: 99%

“…Although compensation schemes mainly focus on financial metrics and tend to disregard the value to other stakeholders, inclusion of non-financial metrics may lead to good sustainable performance and enhance corporate survival (Baron 2008). CEOs can be held accountable for the sustainable performance of the firm if firms include sustainability-related terms in executive compensation plan (Maas and Rosendaal 2016).…”

Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

“…The existence of sustainability targets in CEO compensation may pose a credibility question about positive sustainable performance and raises the need for controllability in sustainable-related targets (Maas and Rosendaal 2016;Berrone and Gomez-Mejia 2009b). The complexity of sustainable strategies and actions goes beyond the expertise of board members and sustainability committees and in the presence of explicit pay for sustainability performance in CEO compensation voluntary assurance can add credibility and help to ensure that appropriate measurement standards have been applied (Brown-Liburd and Zamora 2014).…”

Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

See 4 more Smart Citations

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011-2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management's behaviour and be concerned about the achievement of sustainability goals.

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Section: Descriptive Statisticssupporting

confidence: 89%

“…Kolk and Perego 2014) or in international settings (e.g. Francoeur et al 2017;Maas and Rosendaal 2016). The results of exiting studies are mixed.…”

Section: Executive Compensation and Social Performancementioning

confidence: 99%

Section: Executive Compensation and Social Performancementioning

confidence: 99%

Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

See 3 more Smart Citations

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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Behavioral Effects of Sustainability‐Oriented Incentive Systems

Huber

Hirsch

2015

Bus Strat Env

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Companies increasingly extend their existing incentive systems by integrating several sustainable performance indicators. Although these ‘sustainability‐oriented’ incentive systems clearly highlight which business objectives should be attained, little is known about the effects that these incentive systems have on employee behavior. Based on signaling theory, social identity theory and a person–organization fit (PO‐fit) perspective, we assume positive relations between sustainability‐oriented incentive systems and employee attraction, motivation and cooperation. Furthermore, we examine whether these relations are moderated by personal attitudes toward corporate sustainability activities as well as the underlying mechanisms at the moderation (mediated moderation). Our experimental results (with students as future employees) do not give support for a general positive relation between sustainability‐oriented incentive systems and employee behavior. However, our data show that a person's attitude toward corporate sustainability activities moderates the link between sustainability‐oriented incentive systems and employee behavior. Additionally, we find PO‐fit perceptions to mediate the interaction effects. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment

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‘Carrots for Corporate Sustainability’: Impacts of Incentive Inclusiveness and Variety on Environmental Performance

2017

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In this paper we explore the role that managerial incentives play in improving corporate environmental performance, finding that greater inclusiveness of incentive beneficiaries and greater variety of incentive types are important factors in firms' incentive schemes. Drawing on a large dataset of multinational enterprises, our results suggest that including more beneficiaries from different levels within the corporate hierarchy and offering both monetary and non‐monetary rewards are generally more likely to lead to reductions in corporate greenhouse gas emissions. Developing two principles of incentive design, inclusiveness and variety, and the conceptualization of patterns of these in organizations as configurations of incentives, our research contributes substantially to normative advice regarding the relative effectiveness of alternative systems of environmental incentives. Such an understanding of the potential of incentives is critical to informing how firms address complex problems such as sustainability in the context of increasingly extended organizational hierarchies and designs. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

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Sustainability Targets in Executive Remuneration: Targets, Time Frame, Country and Sector Specification

Cited by 63 publications

References 75 publications

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

Behavioral Effects of Sustainability‐Oriented Incentive Systems

‘Carrots for Corporate Sustainability’: Impacts of Incentive Inclusiveness and Variety on Environmental Performance

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