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Farient Briefings January 2025 | Global Companies Show Progress on Climate Incentives
January 8, 2025
Global Companies Show Progress on Climate Incentives
“The surge in the use of environmental measures in executive incentive plans highlights how companies are leveraging compensation structures to spur climate action,” writes Farient CEO Robin A. Ferracone in the foreword to the 2025 Global Trends in Stakeholder Incentives: Climate Strategies and Incentives for Corporate Sustainability.
The eighth annual and fifth consecutive report focused exclusively on worldwide ESG incentive trends is published by the Global Governance and Executive Compensation (GECN) Group, of which Farient is a founder partner.
CEO Exits Soar
CEO departures last year reached record levels. Data from Challenger, Gray & Christmas shows 1,991 CEOs announced their resignations—the highest number since the firm began tracking in 2002. Regarding U.S. public companies, 327 leadership transitions occurred through November 2024 at companies including Boeing, Intel, Nike, Starbucks, Stellantis, and Peloton. The government and nonprofit sectors showed the highest rates of turnover.
These findings are in line with joint research conducted by Corporate Board Member and Farient Advisors last year and in 2023. Turnover at the top is leading board agendas, with 64% of directors who responded in 2024 to the CBM survey reporting they expected a C-suite exit within the year. The report also found that the high-profile CEO turnovers had prompted greater discussions around succession by the full board.
In the News
Renewed Urgency for Deeper Succession Planning After Shooting—Agenda
Corporate boards are re-evaluating succession strategies with heightened urgency in the wake of UnitedHealthcare CEO Brian Thompson’s brazen murder in midtown Manhattan on December 4, 2024. In Agenda, Farient COO R.J. Bannister emphasized the importance of proactive preparedness.
Read more
Where to Find Us
NACD Board Leadership Exchange
March 13
Washington, DC
For more information about these events, please email us at info@farient.com.
ICYMI
First-Time Activists Push Campaigns
A record number of activist shareholders mounted campaigns at global companies in 2024, according to Reuters citing a Barclay’s report. Some 160 investors at fund management firms waged campaigns at 243 companies calling for improved strategic or operational performance or the firing of the CEO. What’s striking about the Barclay’s report is its identification of 45 hedge funders who launched activist campaigns for the first time. The outlook for the months ahead is that unless a company has strong returns and growth, these “pressure tactics” are likely to continue. “Looking back to 2024, it feels almost as if there was a shareholder revolt,” Jim Rossman, global head of shareholder advisory at Barclays, told Reuters.
ISS Review Shows Slow Uptake of Clawback Policy
A review of malus and clawback policies by proxy advisor ISS STOXX found that the great majority of issuers (78%) did not change their clawback policies between 2023 and 2024. Regulation stemming from the 2010 Dodd-Frank Act and promulgated by the Securities and Exchange Commission in 2022 instructed both Nasdaq and the NYSE to enact standards for their listed companies to adopt and disclose their clawback policies. ISS analyzed 2,298 corporate policies and found many that were deficient in their robustness, according to a January 6th post on the Harvard Law School blog.
Upcoming Global Webinars to Focus on Climate Incentives
Executive incentives are increasingly tied to performance on ESG measures. GECN Group and founding partner, Farient Advisors, will present two exclusive webinars for corporate officers and directors to present newly published research focused on stakeholder incentives tied to climate disclosures. The 2025 Global Trends in Stakeholder Incentives: Climate Strategies and Incentives for Corporate Sustainability is available for download here. Stay tuned for dates and times.
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About Farient Advisors
Farient Advisors LLC is an independent premier executive compensation, performance, and corporate governance consultancy. Farient provides a full array of services, linking business strategy to compensation through a tailored, analytically rigorous, and collaborative approach. Farient has locations in Los Angeles, New York, Louisville, and London and works with clients globally through its partnership in the Global Governance and Executive Compensation (GECN) Group. Farient is a certified diverse company and is recognized by the Women’s Business Enterprise National Council.
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