Stakeholder Incentives

ESG Overtures

ESG or stakeholder incentives are becoming part of many executive pay plans. Whether it’s diversity, equity, and inclusion or reaching carbon-neutral goals, our team has built deep expertise on how client ESG issues can be an integral part of their business strategies. Our ESG team is embedded in every client engagement. This accelerates an understanding of a client’s ESG positioning and enhances our ability to evaluate ESG performance, competitive positioning, and change processes to determine the right approach.

Listening to Stakeholders

Stakeholders are pressuring corporations to provide greater transparency and clearly disclose their commitments to ESG goals. Our team follows the shifting interests and priorities of stakeholder groups—investors, employees, consumers, and communities. To that end, each year we publish a global trends research initiative that examines aspects of governance, board structure and composition, shareholder rights, and the increasing use of stakeholder incentives around the world. This research provides our Farient and global GECN Group team with invaluable insights that we use to inform our decisions with clients.

Our ESG-related services include:

ESG benchmarking

We benchmark ESG data, including performance measures, definitions, measurement practices, weightings, award levels, disclosure practices, and other items

Our Data Analytics Team (DAT) maintains an extensive database of global and U.S. ESG measures and trends in incentive practices

Design of ESG-based incentives

We design customized incentive plans mindful of ESG and stakeholder considerations, identify appropriate metrics and goals relevant to each client’s business and tied to long-term value creation

Board oversight of ESG

We evaluate appropriate ESG oversight practices at the Board and Committee levels for various responsibilities concerning environmental, employee, governance, and other issues

All aspects of E, S, and G

We consider all aspects of ESG, such as measurements of greenhouse gas emissions, workforce diversity, and ethics and compliance

ESG disclosures

We review ESG, sustainability, corporate social responsibility, and human capital management disclosures in view of investor and proxy advisor expectations

ESG regulatory and policy research

We provide research and updates on government/regulatory, investor, and proxy advisor rules and policy developments from U.S. and global perspectives

Related case study

  • An ESG Trendsetter Continues to Excel

    This global engineering services company has always been a trendsetter around environmental, social, and governance (ESG) initiatives. In the mid-2000s the company included an ESG modifier in its short-term incentive plan for a number of top executives. The company also wanted greater participation in the incentive program across the organization and measurable market alignment. Farient Advisors provided a review of competitors’ ESG practices and developed a framework for modifying the client’s existing goals to provide a stronger link to the company’s long-term strategy for diversity and climate.

    Read More >

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Let us know how we can help you think differently about executive compensation and its alignment with performance.

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