Compensate

2025 Global Trends in Stakeholder Incentives: What's Next?

This report from Farient Advisors can help you to understand global trends by companies to incorporate stakeholder metrics into executive compensation. In conjunction with the Global Governance and Executive Compensation (GECN) Group, the report analyses data from the most recent public disclosures of 500+ companies. It provides key insights into the use of ESG incentives for executives, as well as actions that directors can take to advance the maturity of ESG incentive plans.

Put your money where your values are

Businesses are facing increasing pressure from investors, regulators, and advisers to incentivise performance on environmental, social, and governance issues. This short article from IR Magazine provides a look at efforts to link sustainability-related metrics to executive compensation in North America, Europe, and Asia. It provides example-centered recommendations and insights that will help you to understand emergent trends in executive compensation, as well as advice from corporate leaders.

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.

How to Tie Executive Compensation to Sustainability

This short article will help you to understand how your organisation can better connect executive compensation with sustainability-related achievements. Instead of focusing on operational metrics, or on efforts far removed from your company's core mission, companies should reward executives for pursuing bold and strategically-aligned sustainable business opportunities.

Paying for net zero: Using incentives to create accountability for climate goals

This report was created to support boards that are considering including carbon targets in executive compensation. A collaboration between PwC and the Leadership Institute at London Business School, it examines whether current practices are meeting investor expectations, as well as the challenges and complexities of including carbon targets in compensation. The report finds that common gaps persist in relation to the degree of transparency of targets, as well as the clarity with which the targets are linked to public-facing decarbonisation goals. To address this issue, the report introduces a four-criteria rubric that can help you to establish credible links between executive compensation and your climate strategy.

Modern Principles for Sensible and Effective Executive Pay

This set of principle from the Aspen Institute will help ensure your organisation aligns executive pay with societal expectations. Specifically, it is written to guide boardroom dialogue on the topic. It includes clear criteria along with a list of key question for each of the five principles covered. This resource will be most useful to your board members and compensation committee.

Moving Cautiously on ESG Incentives in Compensation

Inquiry and action on how to link ESG metrics with executive compensation (and when) is growing, and this resource from Semler Brossey recommends that boards "move cautiously, but move." It highlights common questions and key steps in the process of linking metrics with compensation, and it can help you to understand what's driving ESG in incentives, including sector-driven strategies and calls for greater diversity, equity, and inclusion.

Making sustainability pay: company examples of ESG incentives

A growing number of companies are linking executive pay to sustainability metrics. This short article from Corporate Citizenship lists recent examples that show how industry leaders are leveraging bonuses and short- and long-term incentive plans to incentivize sustainability-related achievements.

Incentivizing What Matters: Designing Meaningful ESG Metrics for Executive Compensation

This guide from ISS Corporate Solutions can help you better understand the growing trend of ESG metrics in executive compensation. It starts by providing key statistics on the prevalence and type of ESG metrics being used across sectors and geographies. It then explains how materiality assessment priorities should inform the selection of executive compensations metrics. Finally, it provides a set of practical tips for designing, measuring, and disclosing ESG metrics linked to compensation. The guide will be most useful to sustainability teams involved in assessing materiality, and boards of directors and HR teams involved in setting executive compensation.

From Ambition to Accountability: Linking executive pay to green targets

This white paper can help you to understand recent trends in the integration of environmental metrics into executive compensation. It explains how the adoption of environmental metrics for executive compensation have progressed over the past decade; focus areas for performance; and incentive reward types. It also identifies persistent challenges that may hinder the effectiveness of aligning executive pay with environmental outcomes, such as minimal weighting, short-termism, and executives modifying metrics for personal gain. This paper will be most beneficial to boards and compensation committees.

2024 Pay For Climate Performance Report: Linking CEO Compensation to Emissions Reduction

This report from As You Sow can help you understand best practice on linking GHG reduction targets to executive compensation. The report is based on a study of how 100 of the largest US companies factor climate metrics into CEO compensation, and it identifies common issues as well as best practices. These findings will be most useful to HR professionals, executive compensation committees, and sustainability teams.

The Platform Living Wage Financials (PLWF)

The Platform Living Wage Financials (PLWF) is a coalition of investors supporting the payment of living wages in their investee companies and associated value chains. Their work - including a living wage assessment methodology - can help your company measure and monitor progress on living wages across your operations and value chain. Their living wage assessment guidance document would be of particular benefit to sustainability and supply chain management teams tasked with supporting the implementation of living wages.

Global Living Wage Coalition