Wealth Disparity and Excess Compensation

Is it Time to Integrate EESG into Executive Compensation?

There is a growing number of shareholder resolutions requesting the adoption and disclosure of environmental, employee, social, and governance factors into executive compensation. This article will help you to understand why the inclusion of EESG criteria into executive compensation programs is an irreversible trend. It explores key obstacles and opportunities and how to navigate them, and provides advice from global directors and executives who have integrated - or are in the process of integrating - EESG into their compensation plans.

This resource is part of the Salzburg Questions for Corporate Governance series by the Salzburg Global Corporate Governance Forum, and was informed by insights from the Driving Accountability: Integrating EESG into executive compensation program.

Labour Share and Value Distribution

This brief from Re:Structure Lab can help you to better understand how the redistribution of value is essential to eliminating forced labour and other types of economic exploitation from the global economy. The brief explains how profits from production are increasingly captured by powerful brands, retailers, and investors, as well as the key underlying factors that are driving inequitably value distribution. It also highlights solutions, such as direct redistribution of value through wage benchmarking; worker-driven social responsibility programs; support for labour organising; the strengthening of anti-trust measures; and more.

2022 Global Report on ESG Metrics in Executive Incentive Plans

This brief from WTW provides a good introduction to how ESG metrics are currently being used in executive incentive plans, specifically among the world's largest public companies in the Global North. It can help you to build your understanding of the most prevalent metrics being used, as well as how ESG is being measured and incorporated into incentive plans.

Aligning Compensation: An investor brief on fair pay and income inequality

More attention needs to be paid to ensuring corporations recognize and reward the value provided by rest of the workforce. This brief from SHARE highlights how often employee performance is overlooked when considering the contributions that a well-compensated CEO provides. The report also looks at ways to elevate the place of the workforce within listed corporations so that boards, executives, and investors can ensure that employees are incentivised.

20 Questions Directors Should Ask About Executive Compensation

This briefing from Chartered Accountants of Canada provides a concise and accessible introduction to the topic of executive compensation, and includes a checklist of questions that can help directors to critically assess and effectively oversee compensation-related decisions and practices, as well as to better understand the qualities of an effective compensation program.

Integrating ESG issues into executive pay

This comprehensive paper from UN-backed Principles for Responsible Investment initiative and Global Compact LEAD (a leadership platform within the UN Global Compact) facilitates discussions between a diverse group of institutional investors and companies to identify the rationale, feasibility, and effectiveness of corporate practices, which include environmental, social, and governance factors within executive management goals and incentive schemes. The main objective of the resulting guidance is to support and enhance the investor-company dialogue on these practices by explaining major opportunities and challenges, as well as practical examples. This document provides a tangible engagement tool to guide dialogue between shareholders and investee companies on this topic.

The "COVID Cut" is Not Enough: Addressing the Negative Social Impacts of Excessive Executive Compensation

This article explains how COVID-19 cuts to executive pay (taken at the base salary level) are a hollow gesture - instead, excess pay to leaders requires wholistic compensation reform to better re-allocate capital. This resource will help you to be understand the capacity of investors to create equitable change around compensation.