September 21, 2021
ESG Incentives: Trends in Plan Design
Semler Brossy recently published its third report in a series looking at ESG incentives. This one dives into trends in plan design. Here are the highlights:
• ESG metrics are most commonly incorporated as part of a scorecard (36%) or qualitative individual performance assessment (28%)
• ESG metrics are far more common in annual plans (57%) than long-term plans (less than 5%)
• As shareholders continue to push for longer-term sustainability goals, we expect increased prevalence of ESG metrics in long-term incentives
We’re regularly posting memos about the latest trends in our “Sustainability Metrics” Practice Area. If you’re considering adding ESG metrics to your plan – or you’re crafting disclosure to explain that decision – make sure to visit our “Checklist: ESG in Executive Compensation Plans” for issues to think about.
– Liz Dunshee