IDEAS home Printed from https://ideas.repec.org/a/eme/jaarpp/v17y2016i3p311-330.html
   My bibliography  Save this article

The use of sustainability incentives in executive remuneration contracts

Author

Listed:
  • Heba Abdelmotaal
  • Magdy Abdel-Kader

Abstract

Purpose - The purpose of this paper is to examine which firm characteristics affect the usage of sustainability incentives in executive remuneration contracts, and whether these sustainability incentives have an impact on shareholders’ return. Design/methodology/approach - The analysis is based on a sample of 212 firms from the FTSE 350 firms over the period of 2009-2011. Findings - The results indicate that there is a significant relationship between the adoption of sustainability incentives in executive remuneration and firm size, compensation committee independence, the corporate social responsibility (CSR) sustainability committee, CSR sustainability index, and resource efficiency policy variables. Further, there is evidence to support a positive impact on the shareholders’ return. Research limitations/implications - The results of this study should be interpreted within two limitations. First, the limited numbers of the sample years due to the limited number of firms used sustainability incentives. Second, the use of a dummy variable in the measurement of the adoption of sustainability incentives in the analysis. Practical implications - The paper includes implications for the development of sustainability incentives within the performance measurement system and compensation contracts that could be a solution for the agency problem. Originality/value - This study provides empirical evidence on an increased use of sustainability incentives in UK firms, and identifies firm’s characteristics that explain such increase in the sustainability incentives, finally its positive impact on the shareholders’ return.

Suggested Citation

  • Heba Abdelmotaal & Magdy Abdel-Kader, 2016. "The use of sustainability incentives in executive remuneration contracts," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 17(3), pages 311-330, September.
    • Handle: RePEc:eme:jaarpp:v:17:y:2016:i:3:p:311-330
    DOI: 10.1108/JAAR-12-2013-0123
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JAAR-12-2013-0123/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JAAR-12-2013-0123/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JAAR-12-2013-0123?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Habib Jouber, 2019. "How does CEO pay slice influence corporate social responsibility? U.S.–Canadian versus Spanish–French listed firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(2), pages 502-517, March.
    2. Charl de Villiers & Jing Jia & Zhongtian Li, 2022. "Corporate social responsibility: A review of empirical research using Thomson Reuters Asset4 data," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4523-4568, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jaarpp:v:17:y:2016:i:3:p:311-330. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.