Most of the prior studies on executive remuneration lack nuanced qualitative analyses of the design of sustainability-related incentive plans. In particular, little is known about several design elements, such as the types and weights of key performance indicators (KPIs), the KPIs targets, and their range of values and achievement levels. Through in-depth documentary analysis, this chapter aims to fill this gap by exploring, through a detailed and comparative analysis, the design of incentive plans addressing environmental, social-, and governance-related goals. Specifically, this chapter focuses on the sustainability-related incentive components for CEOs of Italian non-financial companies listed on the FTSE-MIB index. The main findings show a general enhancement in the design of sustainability-related incentive plans, considering their use, scope, and specificity regarding targets and their attainment. However, weaknesses persist, particularly concerning the motivation behind adopting this form of incentive plan and the related KPIs. In addition, this chapter highlights a biased focus on a small subset of stakeholders, the delayed presentation of targets, and the low difficulty level in achieving these targets. For these reasons, this study stresses the need for more robust, transparent, and challenging sustainability-oriented incentive structures to contribute to corporate social, environmental, and governance-related goals effectively.

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The Evolution of CSR Contracting in Italian Non-financial Listed Companies

  • Simone Aresu,
  • Luigi Rombi,
  • Mariem Khalfaoui

摘要

Most of the prior studies on executive remuneration lack nuanced qualitative analyses of the design of sustainability-related incentive plans. In particular, little is known about several design elements, such as the types and weights of key performance indicators (KPIs), the KPIs targets, and their range of values and achievement levels. Through in-depth documentary analysis, this chapter aims to fill this gap by exploring, through a detailed and comparative analysis, the design of incentive plans addressing environmental, social-, and governance-related goals. Specifically, this chapter focuses on the sustainability-related incentive components for CEOs of Italian non-financial companies listed on the FTSE-MIB index. The main findings show a general enhancement in the design of sustainability-related incentive plans, considering their use, scope, and specificity regarding targets and their attainment. However, weaknesses persist, particularly concerning the motivation behind adopting this form of incentive plan and the related KPIs. In addition, this chapter highlights a biased focus on a small subset of stakeholders, the delayed presentation of targets, and the low difficulty level in achieving these targets. For these reasons, this study stresses the need for more robust, transparent, and challenging sustainability-oriented incentive structures to contribute to corporate social, environmental, and governance-related goals effectively.