Dana Whitfield· Director, Global Compensation, Meridian Health Systems
Asked in Executive Compensation ·
I am with a part state-owned listed utility in the Nordics. The annual bonus currently has 20% on non-financial measures: safety, employee engagement and customer satisfaction. The board wants to add emissions reduction and bring the total to 35%.
Two of our institutional holders have told us informally that they are becoming sceptical of ESG measures in annual plans because they almost always pay out above target.
Where have others settled on weighting, and do you put climate measures in the bonus or in the long-term plan?
0 reactions · 4 replies · 4 views
Nadia HaddadCRP
Director of Rewards, MEA, Qasr Holdings
Climate in the long-term plan, safety in the bonus. Emissions do not move in twelve months in a way management controls; a mild winter does more than any decision. We have 15% of the long-term award on absolute scope 1 and 2 reduction against a published pathway, verified externally.
Priya RaghunathanGRS, CSI
Head of People Analytics, Calibre Software
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%.
James OkaforCRP, CEP
VP, Total Rewards, Halcyon Financial Group
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.
Nadia HaddadCRP
Director of Rewards, MEA, Qasr Holdings
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.
