The determinants of ESG-linked executive pay

In recent times, a series of scandals and crises highlighted the danger that corporate conduct can create negative externalities and harm to society. Recognition of this problem has prompted an increased focus on issues relating to sustainability and ESG, including in the area of executive compensation. This paper provides an overview of developments relating to the design and regulation of the integration of ESG targets in executive compensation packages and provides empirical evidence relating to prevalence of this trend in public listed companies today.