The Global Governance and Executive Compensation Group (GECN Group) is a global consortium of independent remuneration consultants of which Guerdon Associates is a founding member.

Each year, Guerdon Associates and the GECN Group publishes its research report on global trends in corporate governance. The 2020 report (see HERE) involved a comprehensive review of environment, social and governance (ESG) metrics used in incentive plans across the leading companies in global markets.

This year’s research aimed to examine any year-on-year trends on companies using ESG Plus™ measures in incentive plans, particularly changes in response to the COVID-19 pandemic. The scope of research  was expanded to include leading market practice of ESG measures in South Africa’s JSE Top 40 companies, while maintaining research coverage of the USA’s S&P 100, Canada’s TSX 60, France’s CAC 40, Germany’s DAX 30, Switzerland’s SMI 20, the United Kingdom’s FTSE 100, Australia’s ASX 100 and Singapore’s STI 30.

The research shows Australia appears to do more in incorporating ESG measures in executive incentive plans. Continental Europe and the United Kingdom companies follow closely behind. American and Singaporean companies continue to lag in recognising ESG standards in executive pay.

Figure 1: Proportion of companies with ESG measures (by region)

The full report and our upcoming articles will also dive deeper into the details of the ESG measures, breaking it down further and examining:

• Has the focus of social measures shifted from health and safety towards diversity, equity and inclusion measures?
• Are ESG measures still predominantly incorporated in short-term incentive plans? Are companies starting to introduce long-term incentive ESG measures?
• How much weight is given to ESG measures in an executive’s total remuneration package? Does it actually have a significant impact on their remuneration outcomes?

The full report will be published later this year.

To receive the report, please contact us at info@www.guerdonassociates.com

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