Shearman & Sterling LLP 29 | ESG and Incentive Compensation Plans: Are Investors Satisfied?
Weighting of Holistic
Individual Performance
Weighting of Individual
ESG Metric
39 21
of the Top 100 Companies include ESG
metrics in a holistic qualitative review
of individual performance
of the Top 100 Companies include ESG
as an individual metric
1
2 2 2
1 1
2
3
10
2
8
5
10
1
11
1
2
9
30%
25%
20%
15%
10%
7.5%
5%
Percentage
not specified
67%
50%
25–34%
20%
15%
10%
Discretionary
modifier
Percentage
not specified
ESG METRICS IN THE INCENTIVE COMPENSATION PLANS OF THE TOP 100 COMPANIES
60
surveyed companies
incorporate ESG metrics
into their executive
compensation program
of these companies include them in their annual plan
51
in both their annual plan and their long-term plan
7
Shearman & Sterling's review of the Top 100 Companies reveals that:
ESG means different things to different companies. This is how companies that used ESG metrics defined ESG:
7
have ESG metrics
that apply only
to certain named
executive officers
or that are tailored
for each named
executive officer
specifically
reference a focus
on diversity
state that a focus on safety
is a metric, down from 17
companies last year that
stated that increasing the
health and safety of their
employees was a metric
43 12
in their long-term plan only and
2
