The Effect Of Executive Remuneration On Sustainable Performance With Board Characteristics As A Moderating Variable In Public Companies In Indonesia

The corporate governance shift toward stakeholder capitalism has elevated Environmental, Social, and Governance (ESG) performance to a business imperative. In Indonesia, despite mandatory sustainable finance regulations, a practical gap persists where most companies fail to link board remuneration with ESG metrics, risking moral hazard and managerial myopia. This study analyzes the effects of Board of Directors' and Board of Commissioners' Remuneration on Sustainable Performance (ESG Score) and evaluates the moderating roles of Board Independence and Board Gender Diversity. Adopting an explanatory causal-associative design, this study examines panel data from 120 nonfinancial listed firms on the Indonesia Stock Exchange over 2020–2024. Data were analyzed using panel data regression via the Fixed Effect Model. Findings demonstrate that both Directors' and Commissioners' Remuneration positively and significantly affect ESG performance. Board Independence significantly strengthens the positive effect of Directors' Remuneration but does not moderate Commissioners' Remuneration. Conversely, Board Gender Diversity significantly strengthens the positive impacts of both remunerations on ESG outcomes. Executive remuneration acts as an effective agency bonding mechanism, while board independence and gender diversity serve as vital monitoring catalysts ensuring actual sustainability implementations.