["Corporate Social Responsibility and Environmental Management, EarlyView. ", "\nABSTRACT\nDrawing on agency theory, this study investigates the relationship between executive compensation structure and environmental innovation, focusing on fixed, short‐term, and long‐term compensation components. The analysis is based on a panel of 111 non‐financial firms listed in Brazil over the period 2010–2024, using data obtained from the London Stock Exchange Group Workspace and the Brazilian Securities and Exchange Commission (CVM). To examine whether executive compensation influences eco‐innovation, the study employs the Panel‐Corrected Standard Errors (PCSE) estimator. In addition, the two‐stage least squares (2SLS) approach and the Generalized Method of Moments (GMM) are applied to address potential endogeneity concerns. The findings reveal that stock‐based compensation is positively associated with eco‐innovation, suggesting that long‐term incentive mechanisms mitigate agency conflicts between executives and shareholders and encourage the adoption of environmentally oriented practices. By contrast, fixed compensation exhibits no significant relationship with eco‐innovation, as its performance‐independent nature provides limited incentives for executives to pursue environmental initiatives. Similarly, short‐term compensation does not appear to influence environmental innovation, as its emphasis on immediate financial outcomes may discourage investments in long‐term strategic initiatives, including green innovation. These findings extend the agency theory literature by demonstrating that stock‐based compensation constitutes an effective governance mechanism for aligning managerial and shareholder interests and fostering eco‐innovation. In contrast, fixed remuneration and short‐term incentive schemes tend to prioritize short‐run performance over long‐term value creation. This pattern is likely to be particularly relevant in the Brazilian institutional context, which is characterized by concentrated ownership structures, the prevalence of family‐controlled firms, and relatively weaker investor protection mechanisms, thereby increasing the importance of long‐term incentives in promoting environmentally oriented innovation.\n"]