Why More Companies Are Linking CEO Pay To ESG

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As companies increasingly consider tying parts of executive compensation to ESG measures, they signal a broader corporate embrace of social responsibility principles. But the actual practice of incorporating those measures within a compensation program is easier said than done.

. According to the Survey, a primary motivating factor for incorporating ESG measures into executive compensation, is to both emphasize to investors the priority a company attributes to its ESG initiatives, and to support the satisfaction of company ESG commitments.. The Survey is not, however, “pollyannish” with respect to the practice of tying compensation to ESG measures, and identifies a number of concerns which are worthy of board attention.

-Third is the need for companies to tailor the ESG incentive model to their own necessities, as opposed to “simply following the trend,” as the Survey warns against. -Sixth is the internal organizational awareness of the difficulties that can be encountered in measuring how ESG performance goals can impact compensation.The Survey results notwithstanding, there are several other factors that should be taken into consideration when evaluating the advantages and disadvantages of tying some portion of executive compensation to ESG principles.

 

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ESG is a scam, corporations should be worried about maximizing profits for their investors… not throwing money away to make some people feel good. Shareholders need to start suing on the basis of them not pursuing the best financial outcomes for the company…

When countenancing corporate suicide there is no need for half measures. tt:lizpeek

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