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- Title
Linking Executive Compensation to Climate Performance.
- Authors
Ritz, Robert A.
- Abstract
Climate change has risen to board level on the corporate agenda. Under pressure from institutional investors, companies are reformulating their strategies for a low-carbon world. A novel aspect of the emerging corporate response is that executive compensation is being linked to climate performance. This article examines the different ways that climate-linked incentive pay is used at European and U.S. energy majors, and it develops a framework—aimed at companies in "hard-to-decarbonize" sectors—to understand the benefits, challenges, and key design options. It also makes recommendations on how this organizational practice might be refined over time.
- Subjects
EXECUTIVE compensation; CLIMATE change; AGENDA setting theory (Communication); INSTITUTIONAL investors; STRATEGIC planning
- Publication
California Management Review, 2022, Vol 64, Issue 3, p124
- ISSN
0008-1256
- Publication type
Article
- DOI
10.1177/00081256221077470