As the principles of sustainable development become increasingly embedded in corporate practice, a firm’s environmental, social, and governance (ESG) performance has emerged as a pivotal metric for assessing its long-term sustainability and resilience. Drawing upon the behavioral theory of the firm (BTOF) and the behavioral agency model (BAM), this paper uses data from A-share listed companies in Shanghai and Shenzhen from 2011 to 2022 to empirically investigate the impact of industry-referenced executive compensation incentives on corporate ESG performance. The results show that executive compensation incentives exceeding the external reference point exerts a significant positive impact on corporate ESG performance. Mechanism testing reveals that such industry-referenced executive compensation incentives elevate the attention from both financial analysts and the media, while simultaneously directing managerial attention toward environmental and social responsibilities, thereby facilitating improvements in corporate ESG performance. Heterogeneity analysis indicates that this positive effect is more pronounced among firms in heavily-polluting industries, those subject to stringent environmental regulations, and those with environmental protection background in management. Further analysis confirms that firms whose compensation incentives exceed the external reference point do not experience ESG decoupling. This paper reveals the effects of executive compensation incentives from corporate ESG performance and ESG decoupling, and explores the underlying mechanism based on external and managerial attention, providing empirical evidence for optimizing corporate incentive structures.