IESE Business School
December 13, 2021 – 05:00 – 06:15 PM (CET)
Live virtual event: please register for this talk via Zoom
Professor Gaizka Ormazabal received a PhD in Business from Stanford University, a PhD in Construction Engineering from Universitat Politecnica de Catalunya, and a Bachelor’s Degree in Civil Engineering (Ingeniería de Caminos, Canals y Puertos) from Universitat Politécnica de Catalunya.
Professor Ormazabal’s research focuses on executive compensation and corporate governance. His work examines the choice and valuation implications of corporate governance mechanisms. His current research projects analyze recent trends in managerial compensation, corporate governance intermediaries, financial regulation, bank accounting, and the role of corporate governance in sustainable development.
His research appears in leading academic journals including Journal of Accounting and Economics, Journal of Financial Economics, Journal of Law and Economics, The Accounting Review, Journal of Finance, and Journal of Accounting Research. His research has been featured in the popular media, including such outlets as the Wall Street Journal, the New York Times, and The Economist, and has been cited in final rulings by the U.S. Securities and Exchange Commission. He is a Research Affiliate in the Financial Economics program of the Center for Economic Policy Research (CEPR) and research member in the European Corporate Governance Institute (ECGI). He holds the Grupo Santander Chair of Financial Institutions and Corporate Governance and serves as academic director at the IESE Center for Corporate Governance.
We examine the use of ESG performance metrics in executive compensation contracts. We first document that a growing fraction of publicly traded companies around the world now incorporate ESG metrics in the compensation schemes of their top executives. Our analysis links the reliance on these metrics to firm fundamentals, the geographic location of firms as well as the prevalence of institutional shareholders. Our findings also suggest that the adoption of ESG variables in managerial performance measures is followed by improvements in ESG performance and meaningful changes in the compensation structure of executives.