Shearman And Sterling

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Oct 08, 2020

ESG Slowly Finding its Way into Incentive Compensation Plans

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ESG SLOWLY FINDING ITS WAY INTO INCENTIVE COMPENSATION PLANS

Incentive compensation has long been a board’s primary tool to ensure the interests of management are aligned with the interests of its shareholders. To that end, the ongoing challenge facing compensation committees is choosing metrics that motivate management to optimize shareholder value without incentivizing behaviors that focus on short-term stock price appreciation that can threaten the company’s long-term interests.

In this chapter of our 18th Annual Corporate Governance & Executive Compensation Survey, we examine the forces have led to the increased use of ESG metrics in incentive compensation plans and action items for companies looking to consider incorporating ESG metrics into their incentive compensation programs.

Read “ESG Slowly Finding its Way into Incentive Compensation Plans.”

Authors and Contributors

Matthew Behrens

Associate

Compensation, Governance & ERISA

+1 212 848 7045

+1 212 848 7045

New York

Annie P. Anderson

Associate

Compensation, Governance & ERISA

+1 212 848 4109

+1 212 848 4109

New York

Sonia Khandekar

Associate

Compensation, Governance & ERISA

+1 212 848 5325

+1 212 848 5325