ESG Incentive Practices at S&P 500 Companies

We have released the 2023 Meridian study of the use of ESG-related metrics in short- and long-term incentives granted to CEOs at S&P 500 companies. The analysis provides an executive summary followed by more detailed examination of E, S, & G respectively including:

• Prevalence of metrics
• Types of metrics
• Industry variations
• Other practices

Highlights

Here are some of our main findings:

• There was modest increase in overall prevalence (68% to 73%) of companies incorporating one or more ESG metrics into the STI and/or LTI incentive awards granted to their CEOs
  • Usage of one or more ESG metrics is common across all industry sectors – predominantly in STI
  • Only amongst Utilities are ESG metrics a majority practice in LTI (mostly environmental metrics)
• Social metrics are by far the most common category of ESG metrics (66%), more than double either of the other two categories
• Among top 10 ESG metrics 7 are Social, 2 are Environmental and 1 Governance
• Actual or implied weighting of ESG metrics remains low, typically 5% – 15%

Download Insight as PDF for the full study.

The analysis is based on data provided by ESG data analytics firm ESGAUGE.