Executive Summary
The challenge of running a sustainable enterprise has taken center stage among shareholders. The dilemma for directors, however, is determining what aspects of sustainability, or ESG performance, should have priority — and should be linked to pay incentives. Compensation committees often start by tying bonuses and long-term incentives to goals related to compliance and risk management. That approach may please some stakeholders, but it may put the focus on issues far removed from the company’s core mission. A better approach is to have bonuses depend…
