Chief executive officers (CEOs) of environmental, social, and governance (ESG) firms are known to take lesser pay and engage themselves in corporate social responsibility activities to achieve the dual objective of the enhancement of firm’s performance as well as benefit for stakeholders in the long run. This 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.

This paper aims to empirically examine the moderating role of ESG disclosure while determining performance-based CEO pay. The compensation pay given to the CEOs must be linked to corporate sustainability so as to motivate them to act towards non-economic goals vis-à-vis earning profits. A total of 67 companies listed in the NSE Nifty 100 ESG index spanning six years from 2014 to 2019 have been taken as the panel data sample. As a baseline methodology, the PCSE model is applied and further two-step system GMM model has been considered for robustness check. The findings reveal that ESG disclosure scores show a significant positive effect in moderating the CEO pay-performance relationship. Stand-alone ESG measures indicate that except for social disclosure scores, all the other indicators depict a significant impact in determining the effect of firm performance on CEO pay. This study implies consideration of non-financial performance measures while determining CEO Pay.

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This paper aims to empirically examine whether the negative impact of greenhouse gas emissions and energy use disclosures alleviates or exacerbates the positive impact of an overall Environmental, Social and Governance (ESG) disclosure while determining the performance-based CEO pay. A total of 67 companies listed in the NSE Nifty 100 ESG index spanning six years from 2014 to 2019 have been taken as the data sample. As a baseline methodology, the Panel Corrected Standard Errors model is applied and a further two-step system GMM model has been considered for robustness check. ESG disclosure scores show a significant positive effect on the pay–performance relationship, while its interaction with the emissions/energy use disclosure index gives a negative impact. The results indicate that the significant positive effect of ESG disclosure scores cannot reinforce the negative impact of emissions or energy use while ascertaining the performance-based CEO compensation.