ESG Spotlight | The State of Pay: Executive Remuneration & ESG Metrics
In The State of Pay: Executive Remuneration and ESG Metrics, we assess how ESG criteria are factored into executive variable remuneration plans (“ESG pay-links”).
With investors increasingly incorporating ESG considerations into their investment decisions, many are looking into how corporate leadership may be incentivized to pursue an ESG agenda. This report offers insights to global equity investors considering pay-links as a topic for corporate engagement. Below are some of the findings from our report.
- Only 9 percent of FTSE All World companies link executive pay to ESG criteria, most of which address occupational health and safety (OH&S) risks in the materials, energy and utilities sectors.
- A sizeable portion of firms based in Australia (20 percent), Canada (16 percent) and France (10 percent) disclose pay-links we regard as relatively transparent.
- The median Lost Time Injury Rate (LTIR) of at-risk firms with an OH&S pay-link is 0.19 per 200,000 hours worked, compared to 0.09 for those without one.
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