ESG measures in the annual bonus: what weighting survives investor scrutiny?

The scepticism is earned. I went back through our own history: non-financial measures paid on average 78% of maximum over six years, financial ones 54%. We responded by cutting the number of measures from seven to three and publishing targets and outcomes for each. Weighting stayed at 25%.

I would not fixate on the percentage. Our holders care whether the measures are quantified and whether a fatality or serious incident overrides the result. We have 30% non-financial, all with numeric targets, and a rule that the safety element pays nothing in a year with a fatality regardless of the frequency rate.

For a utility with the state on the register, 35% may be perfectly acceptable to the owner and still draw votes against from international funds. We run at 30% and explain the ownership context every year. Roughly 8% of votes go against, consistently, and the board accepts that.