The Wall Street Journal reported on the trend toward companies eliminating diversity, equity, and inclusion metrics from their executive compensation plans based on its review of proxy statement disclosures.
With proxy statement disclosures representing a lagging indicator (i.e., reflecting the preceding fiscal year compensation programs), the increase year-over-year in the number of companies eliminating DEI pay metrics (from 20 companies to 29 companies based on proxies filed during the 2023 and 2024 proxy seasons, respectively) and drastically reduced number of companies adding DEI metrics (from 81 companies to 26 companies based on proxies filed during the 2023 and 2024 proxy seasons, respectively), indicates that this trend has been underway well before the recent change in administration that is expected to further influence DEI-linked pay practices.
While a majority of the S&P 500 (57%) still disclosed a link between DEI goals/metrics and executive pay in their 2024 proxy statements, the percentage is expected to show a decline this season and going forward (at least for the foreseeable future) and/or reflect a dilution of the relevant metrics.
The article provides examples of companies that have made or are planning to make changes in their DEI-related pay metrics.
Access additional resources on our Executive Pay page » Non-Financial Metrics (Sustainability, DE&I, etc.) and Surveys/Studies.
This post first appeared in the weekly Society Alert!