Companies have crossed the Rubicon in integrating environmental, social & governance (ESG) performance into their executive incentive plans. With three-quarters of S&P 500 index companies embedding some type of ESG metric into their leadership compensation policies, the practice is now deeply ingrained. But there is an opportunity to move beyond generic goals and tailor ESG performance measures in a way that contributes to competitive advantage and long-term growth.

The Conference Board and ESGAUGE conducted a thorough analysis of executive incentive plans described in 2023 proxy statements, and the following are our key findings and insights on the use of ESG performance metrics.

(more…)