Pensions and Investments – Move to link exec pay to ESG integration growing

Now in the second year of the COVID-19 pandemic, investors are raising expectations about companies’ responses to highlighted ESG issues such as diversity and, increasingly, connecting that to executive compensation.

Robin Ferracone is CEO of Farient Advisors LLC in Pasadena, Calif., an executive compensation and corporate governance consulting firm that helps companies, large public pension funds and mutual funds review proxies and prepare votes on executive pay packages. In the Pensions and Investments article, “Move to link exec pay to ESG integration growing”, This year, she said, ” investors are really pressuring corporates to focus on ESG” particularly as COVID-19 shifts the spotlight to stakeholder issues, including employee welfare and racial and income inequality.

“Companies are now saying this is serious, and we need to seriously ask ourselves whether we should change our compensation,” said Ms. Ferracone, who sees more corporate boards and even federal and state regulators paying closer attention to executive compensation.

Measures for connecting issues like workforce diversity, gender balance pay, employee engagement and retention, or health and safety to executive compensation are just starting to develop and are “all over the map,” Ms. Ferracone said. So far, ESG metrics tend to make up about 20% of executive bonus plans, but she anticipates that more will be included in long-term incentive packages eventually.

“When you add up the investors, the corporations, the employees and the regulators, this is really a groundswell,” she said.

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About Robin Ferracone

Founder and CEO, Farient Advisors/GECN Group

New York: (646) 626-6931
Los Angeles: (626) 799-2700
robin.ferracone@farient.com

As the founder and CEO of Farient Advisors LLC, Robin has led the strategic development and expansion of the executive compensation, performance, and corporate governance advisory firm. Her client work focuses on providing high-impact decision-making support and organizational solutions based on insightful market insights.

With over 30 years of consulting experience, Robin advises clients in business and talent strategies, executive compensation, organization, value management, and performance measurement. She is the author of Fair Pay Fair Play: Aligning Executive Performance and Pay (John Wiley & Sons, 2010). In addition, Robin has authored numerous articles, is a regular contributor to Forbes.com and Directorship magazine, and is often quoted in national publications. She is a frequent presenter for prominent organizations such as the Council of Institutional Investors, Society for Corporate Secretaries and Governance Professionals, the National Association of Corporate Directors (NACD), and The Conference Board.

Robin formerly served on the board of directors of Trupanion, Inc., where she chaired the compensation committee. In addition, Robin is a trustee emeritus of Duke University. She currently chairs the board of WildAid and is a member of 5050 Women on Boards, NACD, Women Corporate Directors, YPO Gold, and the Trusteeship. For 12 years, Robin has been named to the NACD Directorship 100, a list of the most influential people in corporate governance and the boardroom. In 2014, she was selected as one of EY’s Entrepreneurial Winning Women, an annual competition recognizing female entrepreneurs. Robin is also a founding partner of the Global Governance and Executive Compensation (GECN) Group collectively serving clients in more than 35 countries across five continents.

Robin received an MBA from Harvard Business School and a BA in management science and economics from Duke University.

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