Environmental, Social, and Governance (ESG)-linked executive compensation is a growing tool for aligning managerial decision-making with sustainability goals, but its behavioural effectiveness is uncertain in emerging markets. This study examined the impact of ESG-based executive compensation on cost stickiness and firm resilience in Indonesia's transportation and logistics industry. Using panel data from 30 listed firms over 2022 to 2024, representing the entire viable population of firms in the sector that met the study’s reporting and data-completeness criteria, the study applied Random Effects regression to test direct effects, mediation through cost stickiness, and moderation by firm size. The results showed that ESG-linked compensation significantly improved firm resilience, while cost stickiness significantly weakened resilience. However, ESG-based compensation did not significantly reduce cost stickiness, cost stickiness does not mediate the ESG–resilience relationship, and firm size did not moderate the link between ESG compensation and cost stickiness. These findings reveal a clear decoupling between strategic ESG intent and operational managerial behaviour. ESG incentives strengthen resilience at the strategic level, but they do not penetrate embedded cost-adjustment routines at the operational level. The study contributes to management accounting research by showing that the same governance mechanism can generate strategic adaptation without producing comparable change in day-to-day resource adjustment, thereby clarifying the bounded reach of ESG-based executive compensation in logistics firms.

Keywords:
Corporate Governance
Cost Stickiness
ESG Compensation
Executive Incentives
Firm Resilience

*Corresponding Author.
E-mail address: haryanto006@binus.ac.id