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Sustainability Targets in Executive Remuneration Contracts and Corporate Sustainability Performance in the United Kingdom and European Union

Nguyen, Hien Thi Thuc; Ullah, Subhan; Le, Hanh Thi My; Hameed, Affan

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Authors

Hien Thi Thuc Nguyen

Profile image of SUBHAN ULLAH

SUBHAN ULLAH SUBHAN.ULLAH@NOTTINGHAM.AC.UK
Associate Professor in Accounting

Hanh Thi My Le

Affan Hameed



Abstract

This study investigates the impact of the integration of sustainability criteria in executive remuneration on corporate sustainability performance (CSP). The paper tests the pooled OLS models on a cross-country sample comprising 279 firms from 19 European Union countries and the United Kingdom under the period from 2014 to 2018. The results suggest that there is a significant positive impact of sustainability-related executive remuneration on CSP. Furthermore, there is no significant statistical evidence for the moderating impact of the sustainability committee on the relationship between sustainability-related contracting and CSP. Moreover, the results reveal that the moderating effects of official CSR disclosure and external assurance for sustainability reports are significantly negative. We suggest that regulators and practitioners promote the integration of sustainability targets in executive remuneration to improve CSP and review the quality of sustainability reporting systems.

Citation

Nguyen, H. T. T., Ullah, S., Le, H. T. M., & Hameed, A. (2023). Sustainability Targets in Executive Remuneration Contracts and Corporate Sustainability Performance in the United Kingdom and European Union. Environment Systems and Decisions, 43, 393-415. https://doi.org/10.1007/s10669-023-09901-6

Journal Article Type Article
Acceptance Date Feb 20, 2023
Online Publication Date Mar 14, 2023
Publication Date 2023-09
Deposit Date Mar 15, 2023
Publicly Available Date Mar 15, 2024
Journal Environment Systems and Decisions
Print ISSN 2194-5403
Electronic ISSN 2194-5411
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 43
Pages 393-415
DOI https://doi.org/10.1007/s10669-023-09901-6
Keywords Sustainability-related executive remuneration; sustainability committee; sustainability report; external assurance; corporate sustainability performance
Public URL https://nottingham-repository.worktribe.com/output/18523851
Publisher URL https://link.springer.com/article/10.1007/s10669-023-09901-6

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