IDEAS home Printed from https://ideas.repec.org/a/eme/qrampp/qram-06-2023-0105.html
   My bibliography  Save this article

Sustainability-oriented targets in executive compensation – symbolic measures or significant catalyst for a sustainable transition?

Author

Listed:
  • Alexander Hofer
  • Ewald Aschauer
  • Patrick Velte

Abstract

Purpose - This study aims to analyse the motivations and underlying assumptions of decision makers driving the adoption of sustainability-oriented targets in executive compensation (SCTs) to better understand SCTs’ impact on sustainability performance. Design/methodology/approach - Through a qualitative approach, 15 in-depth interviews are conducted in a two-tier governance setting. Participants include management and supervisory board members, compensation consultants and other stakeholders involved in proxy voting. Findings - SCT implementation is primarily determined by meeting shareholders’ expectations rather than those of other stakeholders. Decision makers react in a differentiated way to increased expectations by implementing either primarily symbolic or substantive measures and encounter different implementation challenges like insufficient data quality and a lack of experience within supervisory boards, both of which potentially contribute to decoupling. Research limitations/implications - The study offers valuable insights for companies in designing SCTs and emphasises the significance of addressing decoupling to effectively enhance sustainability performance through SCTs and provides a foundation for future studies aimed at analysing this phenomenon. Originality/value - Using a neo-institutional theory lens, this study marks one of the first interview-based investigations to distinguish between symbolic and substantial SCTs. It delves deeply into the role of decoupling and the associated challenges, offering fresh perspectives within the under-researched framework of a two-tier corporate governance structure. Moreover, this study aims to meticulously capture the real-world design practices and implementation processes of SCTs through experts, an aspect that was emphasised as a limitation in previous studies.

Suggested Citation

  • Alexander Hofer & Ewald Aschauer & Patrick Velte, 2024. "Sustainability-oriented targets in executive compensation – symbolic measures or significant catalyst for a sustainable transition?," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 21(5), pages 465-493, September.
  • Handle: RePEc:eme:qrampp:qram-06-2023-0105
    DOI: 10.1108/QRAM-06-2023-0105
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/QRAM-06-2023-0105/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no

    File URL: https://www.emerald.com/insight/content/doi/10.1108/QRAM-06-2023-0105/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no

    File URL: https://libkey.io/10.1108/QRAM-06-2023-0105?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
    ---><---

    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:qrampp:qram-06-2023-0105. 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.