ESG and Executive Remuneration – Disconnect or Growing Convergence?Download a PDF of this article
Our team in Dublin, in partnership with CGLytics, has published a white paper on whether ESG measures are being incorporated into executive pay structures. The findings from the paper indicate that greater integration may be needed to ensure pay structures align with the evolution of long-term strategy.
The last decade has seen a steady increase in the focus on Environmental, Social and Governance (ESG) factors from a range of stakeholders and that growing scrutiny appears to have reached a crescendo over the past 18 months. Only the topic of executive remuneration continues to be discussed as frequently as ESG.
FTI & CGLytics have conducted an analysis to determine whether these two topics are increasingly converging. While there is evidence that the number of companies including some form of ESG-related measures in incentive plans has grown, the proportion of overall pay determined directly by performance against ESG criteria remains at the margin.