Executive Pay Tied to ESG Goals Grows As Investors Demand Action

Executive Pay Tied to ESG Goals Grows As Investors Demand Action

Lydia Beyoud in Bloomberg Law reports on the growing trend to tie executive compensation to measurable objectives in the ESG space. In 2021, executive comp plans were linked to ESG goals across a quarter of all U.S. companies, compared to just 16 percent in 2019. For instance, Chipotle ties 15 percent of annual incentive bonuses to GHG reductions and diversity goals; McDonalds links 15 percent of executive bonuses to boosting minority and female representation in leadership roles; and in the oil & gas sector, Marathon and Chevron tie exec comp to reductions in methane and other greenhouse gases.