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Laxman Pai, Opalesque Asia: Four out of five firms (78%) are planning to alter how they incorporate environmental, social, and governance (ESG) into their executive incentive plans due to global events such as the pandemic, economic uncertainties, and social and racial injustice.
According to a new survey of boards of directors at 168 organizations globally by Willis Towers Watson, 41% of companies plan to introduce ESG measures into their long-term incentive plans over the coming three years, while 37% plan to introduce them into annual incentive plans.
Additionally, about a third plan to raise the prominence of environmental and social/employee measures in their incentive plans.
"With institutional investor interest in ESG and sustainable investing increasing, companies are maintaining or accelerating their focus on ESG initiatives," said Shai Ganu, global head, Executive Compensation, at Willis Towers Watson. "We know from our research and consulting that companies' focus is on a stronger alignment of executive compensation plans and ESG priorities, particularly with climate change and environmental measures, inclusion and diversity matters, and overall human capital governance."
The survey revealed that nearly four in five respondents (78%) are planning to change how they use ESG with their executive incentive plans over the next three years. More than four in 10 (41%) plan to introduce ESG measures into their long-term incentive plans over the next th...................... To view our full article Click here
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