A commitment to change? CEO pay and alignment with environmental, social, and governance objectives

In the 2019 Business Roundtable “Statement on Purpose of a Corporation”, over two hundred executives committed to expanding focus their respective corporations beyond shareholder primacy. Following advice from agency theory, compensation committees traditionally seek align executive pay with desired organizational outcomes. Our qualitative study examines whether signatories made discernible changes structures incentives broader stakeholder view. We observe committee reports 135 signatory firms’ proxy statements for fiscal year ending 2020, identify each firm’s incentive structure included measures aligned commitment focus. Nearly half sample firms continued reward exclusively using assess financial objectives, although thirteen promises include corporate performance in 2021 programs. Although most leaders say they act all interests, we do not find evidence that these are incentivized implement strategic and ensure consider environmental, social, sustainable implications decisions. Future research should follow consequences action versus inaction change.