June 26, 2020

Financial Times – Executives incentivised to prioritise diversity

By Andrew Edgecliffe-Johnson 

We know from experience that executives prioritise what they are paid to prioritise, so anyone wondering whether they will live up to their recent promises on taking diversity more seriously should look at the compensation section of companies’ annual reports.

Farient Advisors, a compensation and governance consultancy, has done just that for the S&P 500, finding that just 59 companies mentioned diversity and/or inclusion in their executive pay plans last year, typically as a metric to which short-term incentives were tied.

Earlier this month, Wells Fargo announced that executives’ pay would be tied to how much they had increased the representation and inclusion of diverse employees in their operations. Moral Money will be watching to see how many other companies put their money where their mouth is.

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