This paper examines whether sustainable institutional investors promote corporate social responsibility (CSR)-contingent components (e.g., environmental or social aspects) in senior executive compensation in order to align top management interests in the promotion of sustainability with their own. Empirical analyses of a sample of 5979 firm-year observations from European firms over the 2010–2017 period showed that the presence of sustainable institutional investors positively predicts the likelihood of firms offering CSR-contingent compensation contracts. This paper significantly contributes to prior empirical research, which predominantly focuses on the effectiveness of CSR-contingent components within compensation structures. Sustainable institutional investors as a potential driver of CSR-contingent components have not yet been examined. We specifically investigate institutional investors that have either a substantial or a time-dependent belief in CSR. Our results indicate that sustainable institutional investors represent a central external corporate governance mechanism and tend to align top management preferences with their own via compensation structures.