February 21, 2022

Financial Times – US Companies Add Environmental and Social Targets to Executive Bonuses

Kevin Johnson, Starbucks’s chief executive, earned a slice of his 2021 bonus by slashing plastic straws and methane emissions – an example of a trend by US companies to add environmental and social targets to bonus packages.

Starbucks joined Apple and Disney in adding new and environmental and workplace targets in 2021 pay, according to an analysis by Sentieo, a data provider. Shareholders will get to vote on these provisions in March when the companies hold annual meetings.

“Companies should move toward quantifiable ESG-pay metrics, such as the specifics Starbucks adopted, said Robin Ferracone, founder of Farient Advisors, a pay consultancy. “Companies should be ‘afraid of the blowback’ if they pay bonuses derived from imprecise ESG metrics.”

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