Can Management Incentives Improve Corporate ESG Performance? From the Perspective of the Heterogeneity of Incentive Models

This study utilizes data from A-share listed companies between the years 2012 and 2022 to empirically investigate the impact of management incentives on corporate ESG performance. The results reveal that both management compensation incentives and equity incentives can promote corporate ESG performance, but excessive incentives have a negative effect on corporate ESG performance. Furthermore, compensation incentives and equity incentives improve ESG performance by promoting corporate green innovation and reducing agency costs, and digital transformation serving a positive moderating role in this relationship. Additionally, the impact of management incentives exhibits heterogeneity, compensation incentives demonstrate a more substantial promoting effect on ESG performance in heavily polluting industries and state-owned enterprises, while equity incentives show the opposite tendency. These findings provide valuable insights for designing effective management incentive mechanisms and improving corporate ESG performance.