2021 and Beyond: Global Executive Incentive Trends – The Shift to Non-Financial Measures

January 25, 2021

2020 was truly an unusual year – COVID has brought on many changes to our daily lives in and out of the office. Many companies had to embrace remote working and to review their KPI targets set at the beginning of the year (i.e. pre-COVID).

Another change that has significantly manifested itself is the way we think about stakeholders’ interests: the work-life balance is now a hot topic, as well as the positive effects of COVID lockdowns on the environment.

For the past few years, MM&K (as a part of the GECN Group) has conducted research on global trends in corporate governance. The 2020 research focused on how companies have integrated ESG into the performance measures linked to their executive incentive plans. We are pleased to present the report which analyses the extent to which non-financial objectives are making their way into executive incentives:

2021 and Beyond: Global Executive Incentive Trends – The Shift to Non-Financial Measures.

In our research, we have identified that ESG measures are not simply Environmental, Social, and Governance, but also often include Community and Customer metrics. Thus, we have adopted an ESG Plus™ terminology.

  • The 2021 report includes the following sections:
  • Growing ESG Plus™ Awareness and Action
  • Three Dimensions of Value Creation and Sustainability
  • State of Play: ESG Plus™ Incentives
  • Impact of COVID-19 on Use of ESG Plus™ Measures
  • The Future of Sustainable Value and Executive Remuneration

The research is based on the practices adopted by the leading companies across the Globe:

  • United Kingdom: FTSE 100
  • Continental Europe: CAC 40, DAX 30, and SMI 20
  • United States: S&P 100
  • Canada: TSX 60
  • Australia: ASX 100
  • Singapore: STI 30

As a part of the research, we have also examined into which incentive of their plans companies have incorporated ESG Plus™ measures – both short- and long-term plans:

The research also draws on interviews with renowned corporate governance professionals, public company board members, impact investors and ratings agencies.

Download your free copy of the report here.

Or if you have any queries, please contact Margarita Skripina.

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