Fondazione GRINS
Growing Resilient,
Inclusive and Sustainable
Galleria Ugo Bassi 1, 40121, Bologna, IT
C.F/P.IVA 91451720378
Finanziato dal Piano Nazionale di Ripresa e Resilienza (PNRR), Missione 4 (Infrastruttura e ricerca), Componente 2 (Dalla Ricerca all’Impresa), Investimento 1.3 (Partnership Estese), Tematica 9 (Sostenibilità economica e finanziaria di sistemi e territori).



Open Access
RESOURCES
This chapter examines the integration of sustainability into the executive remuneration contracts in large non-financial listed companies in France, Germany, and Italy. Drawing upon the stakeholder-agency theoretical lens, it explores how sustainability-related criteria are integrated into the executive remuneration design (e.g. time horizon, weight, method of payment, number of KPIs, and nature of KPIs) as well as the process that led to this design and implementation (involvement of remuneration committee, sustainability-related committee, external consultant, and independent assurance). The findings reveal a wide use of sustainability-related criteria in executive remuneration contracts. These criteria exhibit a high level of relevance and actionability, and a varying degree of independent verification. It also emerges that the interest allocated to each stakeholder group is unbalanced among companies in all three countries. This remuneration practice also differs across countries, industries, and incentive plans’ time horizon. In conclusion, this chapter sheds light on the evolving practice of integrating sustainability criteria in executive remuneration contracts and its potential to align CEO interest with targeted stakeholders’ welfare.
AKNOWLEDGEMENTS
This study was funded by the European Union - NextGenerationEU, in the framework of the GRINS - Growing Resilient, INclusive and Sustainable project (GRINS PE00000018). The views and opinions expressed are solely those of the authors and do not necessarily reflect those of the European Union, nor can the European Union be held responsible for them.
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