Using a sample of S&P 500 firms with hand-collected information on the use and substantiveness of CSR managerial compensation from proxy statements between 2000 and 2018, we show that CSR incentives are associated with less risky policy choices and lower volatility. The risk-reduction effect is robust to alternative measures and specifications and various attempts to mitigate endogeneity concerns. Further analysis reveals this effect is stronger when stakeholder interests are more at risk and when the provision of stakeholder-oriented incentives are more likely to be authentic and effective. Exploring the performance implications, we find that CSR incentives improve firm performance, particularly in times of high market uncertainty. Collectively, our evidence suggests that CSR managerial compensation incentivizes prudent risk-taking to safeguard stakeholder interests.