Decoding the interlinkage between CEO compensation and ESG dimensions: a review and future research agenda

Purpose The integration of environmental, social and governance (ESG) metrics into CEO compensation structures has become an increasingly prevalent topic in accounting and corporate governance discourse as contemporary stakeholders increasingly demand that managerial compensation contracts address sustainability challenges. However, this relationship has received limited focus in the academic literature, as most previous studies have concentrated on individual sustainability components linking executive pay. Design/methodology/approach The current study bridges the gap in the corporate governance literature by considering 299 Scopus-indexed articles in 160 journals from 1993 to 2024 that uncover the current research landscape, identify key research areas under each theme, and provide future research opportunities interlinking CEO compensation and different ESG dimensions. Findings The review shows a significant increase in articles on individual ESG dimensions and CEO compensation in the last decade. Further, most articles were inclined towards the study of the governance aspect of ESG and the CEO compensation relationship, with limited attention given to environmental and social factors. The role of CEO psychological traits, the use of qualitative methods, and conducting a cross-border analysis are a few aspects that can be further explored. Originality/value Using a bibliometric-systematic literature review approach, the work is the first to assess the current global research landscape, identify key research areas, predict emerging trends, provide future research directions and contribute to the growth of scholarly understanding in the domain concerning CEO compensation and ESG literature.