Insights by Stanford Business: Does It Pay to Link Executive Compensation to ESG Goals?

More CEOs are getting “ESG pay.” Does it improve their companies’ sustainability and financial performance? Read the recent Stanford Business Insight article, Does It Pay to Link Executive Compensation to ESG Goals?

As ESG investing has boomed, so has a movement to tie executive compensation to environmental, social, and governance goals such as reducing carbon emissions, diversifying the workplace, and improving corporate culture. Like all things ESG-related, this has sparked skepticism and controversy. Are these incentives and bonuses driving CEOs to meet ambitious goals or are they just another way to pad compensation packages?