More companies are tying executive pay to diversity goals
To ensure diversity, equity and inclusion goals aren't falling by the wayside, a growing number of companies are pegging executive compensation packages to meeting DEI targets.
The strategy is growing in popularity. When HR firm Mercer recently analyzed the proxy statements of 300 companies on the S&P 500, the firm found around 27% had tethered executive compensation to DEI goals. That's up from around 12% to 15% before 2020. Starbucks, IBM and Uber are among the method's adopters.
Linking executive compensation with DEI goals has intuitive reasoning behind it, but in terms of how it actually affects executives' behavior, "it's way too soon" to say, said Gregg Passin, U.S. executive compensation leader at Mercer. For the most part, companies have only just begun using this method to bolster their DEI efforts.
Even with more time, the effects won't necessarily be measurable for all companies. Most firms that have embraced the strategy are using a subjective metric for evaluating their DEI progress, or at least what they're disclosing publicly is subjective even if they're using more objective metrics internally, Passin said.
https://www.bizjournals.com/seattle/news/2021/07/23/executive-compensation-and-diversity.html
