The growing global movement of corporate social responsibility, sustainability, conscious capitalism and environmental, social and governance (ESG) criteria is on a collision course with the executive compensation world’s focus on shareholders and adherence to proxy advisers’ checklists. Executive compensation performance measures must evolve quickly, but what’s lacking is a cohesive and comprehensive framework for defining metrics that are consistent with the tenets of conscious businesses and that address the practical and legal constraints of business needs and the zeitgeist of shareholder primacy. This poses a new set of challenges for executive compensation professionals as progressive companies are revisiting their executive compensation incentive metrics.
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