ESG-tavoitteiden integrointi ylimmän johdon palkitsemiseen valtion omistamissa pörssiyhtiöissä

The aim of this study is to examine how ESG targets have been integrated into top management remuneration in state-owned listed companies and to compare these practices with those of European peer companies. The main research question concerns the role and weighting of ESG targets in the variable incentives of CEO. The sub-questions address the substantive emphasis of ESG targets, the differences between short-term and long-term incentives, and the historical development of integration across companies. State-owned listed companies provide an interesting research context, as their operations are influenced both by market-driven pressures and by government guidelines related to sustainability and remuneration. The study is conducted as a quantitative comparative analysis, with data collected from companies’ publicly available remuneration reports and annual reports. The dataset includes all listed companies that are directly owned by the state as well as those owned through the holding company Solidium. For each of these 15 state-owned listed companies, a European peer company of comparable size and industry has been selected. Data were collected on both short-term and long-term variable incentives. The theoretical framework is mainly based on institutional organizational theory and is supported by aspects of agency theory and stakeholder theory. The results show that ESG targets have become a regular part of top management remuneration in state-owned listed companies during the 2020s, although their scope, timing of adoption, and substantive emphasis still vary across companies. ESG targets are currently more common in short-term incentives than in long-term incentives, but this is expected to change in the coming years. In the short-term incentives of state-owned listed companies, social objectives are more strongly emphasized in substantive terms, while long-term incentives focus almost entirely on environmental objectives. In comparison with the peer group, adoption has occurred earlier, and substantive emphases are more broadly focused on social aspects. The historic adoption of ESG targets by state-owned listed companies reflects the Finnish government’s ownership policy guidelines of 2020s, which encourage the integration of sustainability into management remuneration. Overall, the study demonstrates that the integration of ESG targets in state-owned listed companies has taken place as part of the European institutionalization of corporate sustainability, but it also exhibits clear signs of the influence of the Finnish government’s ownership steering.