2020 MM&K / GECN Global Research – ESG as a part of the performance measures

July 30, 2020

In 2019 MM&K, together with our partners in the GECN (Global Governance and Executive Compensation Group) researched global trends in Corporate Governance – investors’ perspective. The outcomes of this research are presented in the Executive Summary of the 2019 Report (click here to request a copy).

The GECN is a group of five independent advisory firms specialising in executive compensation and corporate governance www.gecn.com. GECN member firms have offices in Los Angeles, New York, London, Kiev, Geneva, Zurich, Singapore, Melbourne and Sidney. MM&K represents the GECN in the UK.

Following on from the 2019 research into important aspects of Corporate Governance, as perceived by investors, we are pleased to announce that, this year, we are researching if and how companies have integrated ESG metrics into the performance measures linked to their executive incentive plans. The 2020 Global Research will examine current trends set by companies from the leading indices of the USA, Canada, UK, Europe, Singapore and Australia, including S&P, FTSE, ASX, etc.

The 2020 Report will be published in late September. It will include an analysis of the types of ESG metrics adopted by each market’s leading companies. We will also examine which plans incorporate ESG metrics in their performance criteria – Short-term Incentive Plan, Long-term Incentive Plan, or both. So far, ESG performance measures appear to be more prevalent in Short-term Incentive Plans, even though, as ESG policies require long-term commitments and have long-term effects, it might, instinctively, be thought to have a place in companies’ long term remuneration strategies. The 2020 study will show if this trend is still ongoing.

For more information or to reserve your copy of the 2020 ESG Report, contact Margarita Skripina.

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