This study examines the implementation of Environmental, Social and Governance (ESG) criteria in executive compensation to assess how ownership and governance structures affect ESG-pay adoption. Using a database of 3,587 listed companies from 2012 to 2020, including 1,084 family-owned firms, we explore how family ownership influences ESG-pay integration in CEO compensation, disaggregating ESG pay into its core components. Our findings reveal a lower inclination among family businesses to adopt ESG pay, with social metrics showing a more pronounced negative effect than environmental ones. However, their probability of ESG-pay adoption increases with a higher proportion of independent board directors and CEO-board chair duality. CEOs with family ties are also more likely to receive ESG-linked compensation, possibly due to their greater focus on socioemotional wealth preservation.
