Farient's "2021 and Beyond: Global Trends in Stakeholder Incentives" provides benchmarking data on the use of nonfinancial compensation incentives (referred to as "stakeholder incentives") among the largest companies worldwide based on recent disclosures. Non-financial for this purpose consists of Environmental, Social, Governance, Customer, and Community-related incentive measures (as detailed on page 4 of the report).
Noteworthy US-specific (S&P 100) statistics include:
- 56% of US companies use stakeholder measures in at least one of their incentive plans (most commonly, short-term incentives) compared to 67% of the global sample, which also includes Australia, the UK, Europe, Canada, and Singapore.
- By industry, stakeholder measures are most prevalent among the Utilities, Financials, and Energy industries, both globally and in the US.
- Social measures are by far the most prevalent stakeholder measures across geographies.
- The median weighting of stakeholder measures in incentive plans is 20% both in the US and worldwide.
See the release and our recent reports: "Executive Pay: Benchmarking ESG Metrics," "Incorporating ESG Metrics into Incentive Pay Plans" and "ESG Incentive Metrics by Industry" (including the additional related write-ups and associated resources noted in that latter report), and additional information & resources on our Executive Pay page. This post first appeared in the weekly Society Alert!