TY - JOUR

T1 - Sustainable Management compensation and ESG performance

T2 - The German case

AU - Velte, Patrick

N1 - Publisher Copyright: © Patrick Velte, 2016.

PY - 2016/12/14

Y1 - 2016/12/14

N2 - This paper takes a closer look at sustainable management compensation and the impact on environmental, social and governance (ESG) performance in the German two tier system. The empirical quantitative study covers a sample selection of German companies listed on the Prime Standard of the Frankfurt Stock Exchange (DAX30, TecDAX, MDAX, SDAX) for the business years 2010-2014 (677 firm-year observations). In order to determine a possible link between non-financial indicators of management compensation and ESG performance, a correlation and regression analysis is carried out. On the basis of multiple regressions, non-financial elements (social or environmental aspects) in the management board compensation positively influence ESG performance, as determined by the Asset Four database of Thomson Reuters. This analysis is the first empirical study focusing on a connection between sustainable management board compensation, taking into consideration non-financial aspects, and ESG performance in the German two tier system. Not only users, but also public policy is affected by the findings indicating that national and European regulations on compensation could greatly influence future CSR performance and market reactions.

AB - This paper takes a closer look at sustainable management compensation and the impact on environmental, social and governance (ESG) performance in the German two tier system. The empirical quantitative study covers a sample selection of German companies listed on the Prime Standard of the Frankfurt Stock Exchange (DAX30, TecDAX, MDAX, SDAX) for the business years 2010-2014 (677 firm-year observations). In order to determine a possible link between non-financial indicators of management compensation and ESG performance, a correlation and regression analysis is carried out. On the basis of multiple regressions, non-financial elements (social or environmental aspects) in the management board compensation positively influence ESG performance, as determined by the Asset Four database of Thomson Reuters. This analysis is the first empirical study focusing on a connection between sustainable management board compensation, taking into consideration non-financial aspects, and ESG performance in the German two tier system. Not only users, but also public policy is affected by the findings indicating that national and European regulations on compensation could greatly influence future CSR performance and market reactions.

KW - Management studies

KW - Corporate governance

KW - ESG performance

KW - Management board

KW - Non-financial performance indicators

KW - Stakeholder management

KW - Sustainable compensation

KW - Sustainability Science

UR - http://www.scopus.com/inward/record.url?scp=85007477077&partnerID=8YFLogxK

U2 - 10.21511/ppm.14(4).2016.02

DO - 10.21511/ppm.14(4).2016.02

M3 - Journal articles

VL - 14

SP - 17

EP - 24

JO - Problems and Perspectives in Management (PPM)

JF - Problems and Perspectives in Management (PPM)

SN - 1727-7051

IS - 4

ER -