Research Report | November 4, 2020
2020 Use of Environmental, Social, and Governance Measures in Incentive Plans
By Thomas Kohn, Erin Bass-Goldberg, Tahmid Ali, Alex Yu

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Driven by multiple stakeholders embracing the premise that a strong ESG proposition is an essential element to sustainable long-term company performance, attention on company ESG behavior and transparency is rapidly increasing.

A consequence of ESG proliferation is a growing trend of companies incorporating ESG measures into incentive programs. By tying a portion of executive compensation to ESG outcomes, companies are holding executive teams accountable for such initiatives and communicating to external stakeholders that such measures are critical to long-term company success and sustainable value creation.

Against this backdrop, FW Cook studied current practices among the largest U.S. public companies with respect to use of ESG measures within incentive programs.

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