CEO Compensation and Firm Performance: The Role of ESG Transparency

Chetna Rath(1), Florentina Kurniasari(2), Malabika Deo(3),

(1) Pondicherry University, Department of Commerce, School of Management, India
(2) Universitas Multimedia Nusantara, Technology Management Department, Indonesia
(3) Pondicherry University, Department of Commerce, School of Management, India


Chief executive officers (CEOs) of Environmental, Social, and Governance (ESG) firms are known to take lesser pay and engage themselves in corporate social responsibility (CSR) activities to achieve the dual objective of the enhancement of firm’s performance as well as benefit for stakeholders in the long run. The present study examines the role of ESG transparency in strengthening the impact of firm performance on total CEO pay in ESG firms. A panel of 67 firms for the period of 2014–2019 has been analyzed using the two-step system GMM model, with NSE Nifty 100 ESG Index as the data sample and ESG scores from Bloomberg database as a proxy for transparency. Findings reveal that Environmental and Governance disclosure scores have the potential to intensify the negative relationship between firm performance and CEO compensation, while Social disclosure scores do not. In addition, various firm-specific, board-specific, and CEO-specific attributes have also been considered controls affecting remuneration. This paper contributes to the literature by exploring the effect of exhibiting ESG transparency and its nexus with CEO pay as well as firm performance.


CEO Compensation, ESG Firms, ESG Transparency, Firm Performance, India






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Indonesian Journal of Sustainability Accounting and Management (IJSAM) 
p-ISSN 2597-6214 | e-ISSN 2597-6222 
Published by Universitas Pasundan, Indonesia.
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