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ESG-Linked Pay Considerations

By Randi Morrison posted 02-13-2023 05:01 PM

  

What Boards Should Ask Management About Compensation and ESG” from The Conference Board provides guidance to companies on whether and how to link executive or employee pay to ESG metrics in the form of five questions that should be asked and satisfactorily addressed before jumping on the ESG pay bandwagon. Coverage includes the “why” (purpose), whose pay would be impacted, how the metrics may be integrated into pay, performance measurement, and communications / disclosure. The article uses “red flag” responses to the questions to identify concerns that should make companies think twice before moving forward. 

Access additional resources on our Executive/Employee Pay page » Non-Financial Metrics (Sustainability, DE&I, etc.)

                    This post first appeared in the weekly Society Alert!

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