DATE PUBLISHED: DECEMBER 19, 2024
Environmental, Social and Governance (ESG) concerns have become some of the top issues for corporate America in recent years. However, discussions surrounding these initiatives have become highly politicized and polarized, with anti-ESG shareholder proposals on the rise, certain companies rolling back their DEI initiatives , and falling shareholder vote support for various environmental and social proposals in recent years. At the same time, some shareholders are pushing companies to take more ambitious actions. The U.S. Supreme Court’s June 2023 ruling to significantly limit the use of race status in college admissions has also emboldened investors challenging Diversity, Equity, and Inclusion (DEI) initiatives at public companies.
Many public companies have been incorporating ESG considerations including DEI into compensation programs to incentivize their executives to achieve sustainability and DEI goals as well as financial objectives. Now, some are re-evaluating their approach given the recent shifts in the political and legal landscape. Against this backdrop, ISS-Corporate examined the incentive pay data for S&P 1500 companies to determine the prevalence, usage and payout levels of DEI metrics as well as changes these metrics measure.
