3 Corporate Compensation Plans the Infuse Sustainability into Business
source: http://solveclimate.com/blog/20100426/creative-compensation-plans-weave-sustainability-fabri...
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Despite a global financial meltdown tied to reckless risk-taking, I'm hearing a disturbing trend in advance of upcoming annual shareholder meetings: Most companies are still paying executives in ways that foster short-termism at the expense of long-term sustainability.
I recently spoke at a Financial Times conference in New York about how sustainability is a central corporate governance issue, but left there only partially encouraged. Major investors like John Wilson of TIAA-CREF and Brian Rice of the California State Teachers' Retirement System (CalSTRS) described the innovative ways they’ve made sustainability a part of their company engagement and proxy voting policies.
But these were the exceptions — most companies are still not talking with investors and their boards about sustainability.
I was also disillusioned when Merck’s director of corporate responsibility, Maggie Kohn, expressed concern that most investors are not using information in corporate sustainability reports.
Let’s be clear. Today’s global realities — a changing climate, rapidly emerging economies and the expected arrival of some 2 billion additional humans — demand new business models. If we fail to address the serious risks facing companies now, we will not only face another financial-sector meltdown, we’ll encounter environmental and social upheaval on a scale never before seen.
So what to do?
We all know that one of the fastest ways to get people’s attention is to bring pay into the equation. That’s why I think some of the most exciting news has to do with the innovative compensation schemes a few companies are using to weave sustainability into the fabric of their businesses.
What I like about these three models in particularly is that they show the path forward in different ways ...
http://solveclimate.com/blog/20100426/creative-compensation-plans-weave-sustaina...
I recently spoke at a Financial Times conference in New York about how sustainability is a central corporate governance issue, but left there only partially encouraged. Major investors like John Wilson of TIAA-CREF and Brian Rice of the California State Teachers' Retirement System (CalSTRS) described the innovative ways they’ve made sustainability a part of their company engagement and proxy voting policies.
But these were the exceptions — most companies are still not talking with investors and their boards about sustainability.
I was also disillusioned when Merck’s director of corporate responsibility, Maggie Kohn, expressed concern that most investors are not using information in corporate sustainability reports.
Let’s be clear. Today’s global realities — a changing climate, rapidly emerging economies and the expected arrival of some 2 billion additional humans — demand new business models. If we fail to address the serious risks facing companies now, we will not only face another financial-sector meltdown, we’ll encounter environmental and social upheaval on a scale never before seen.
So what to do?
We all know that one of the fastest ways to get people’s attention is to bring pay into the equation. That’s why I think some of the most exciting news has to do with the innovative compensation schemes a few companies are using to weave sustainability into the fabric of their businesses.
What I like about these three models in particularly is that they show the path forward in different ways ...
http://solveclimate.com/blog/20100426/creative-compensation-plans-weave-sustaina...
