Put your money where your mouth is
We all talk a good game on ESG integration. Compared with a few years ago, we’re much further down the line with ESG reporting, investor messaging and definitions of materiality. But if an issue is truly material to your business, should it not be tied to executive compensation? That’s what some investors think, and it’s the focus of our cover feature this issue.
It’s not as simple as flicking a switch and assigning part of the cash bonus to ESG performance targets; a clumsily designed or hastily implemented plan could inadvertently reward bad behavior. For instance, linking compensation to employee safety could make sense in the year Covid-19 put everyone at risk. But it could lead to under-reporting of employee health and safety issues.
Executive compensation is a complicated topic and varies notably by region so we’ve split the feature into three sections – North America, Europe and Asia – to observe the different approaches around the world.
Speaking of pay, say-on-pay votes always generate interest and headlines. In Europe, there’s a growing movement, led by the Children’s Investment Fund, to add say-on-climate votes to the annual meeting agenda. Several companies are taking note, including Royal Dutch Shell, Glencore, Rio Tinto, Moody’s and CN. The frequency of these votes may vary for all of these companies, but it’s an environmental and governance topic to look out for in the future, as Tim Human explores.
For the growing number of IR professionals joining private companies, investor votes are not a concern. There are some striking differences between IR at pre-public and public companies, but also some surprising similarities – from mock earnings calls to conference participation. I speak to a number of IROs to hear about their recent experiences away from the scrutiny of the public markets.
Elsewhere, we profile the roller-coaster ride that is the Star Market, learn about how some public company executives are changing how they talk when they know artificial intelligence-powered tech is listening in for implicit signals of positive or negative sentiment, and welcome a new regular column: Opening bell, where we’ll interview IROs about a corporate transaction they have worked on recently. In this issue, we hear about Genmab’s dual-listing story.
Finally, this issue marks the one-year anniversary of the shutdowns to protect all of us from Covid-19. Like all of you, the IR Magazine team had a busy schedule of international and domestic travel lined up, all of which evaporated overnight. I sometimes struggle to comprehend how much time we spent in airports and hotels in the before, and it feels unlikely we’ll return to the same volume of travel any time soon. With that in mind, Garnet Roach looks at best practices for virtual roadshows and presents a vision of the future: the corporate access program of an IR team in New Zealand.
And if that’s not enough corporate access for you, our research team takes a look at the effectiveness of virtual investor events, polling IROs and investors to hear what’s worked, what hasn’t – and which virtual interactions are here to stay.
It’s been a remarkable year of disruption, hard work and resilience. I hope you and your loved ones have stayed safe and sane. This winter has been hard for many but, with the rollouts of multiple vaccines, the days getting longer and the sun coming out, I’m hopeful for the future.
As ever, please do get in touch with any questions, comments or suggestions about this issue. Happy reading and I hope to see you all soon.
Ben Ashwell Editor ben.ashwell@irmagazine.com +1 212 430 6869
Editor Ben Ashwell Managing editor & chief copy editor Kathleen Hennessy Senior reporter Garnet Roach Senior reporter Tim Human Contributors Lloyd Bevan, Sean Cao, Jeff Cossette, Lorne Gorber, Laurie Havelock, Wei Jiang, Linda Montgomery, Baozhong Yang, Alan Zhang Editorial advisory board Brian Christie, Janet Craig, Vlad dela Cruz, Gunhild Grieve, Catherine James, Ricardo Jiménez, Richard Jones, Jeannie Ong, Andrew Stephen Founding editor Janet Dignan Design and production executive James Noden Managing director, events Gargi Iyer Head of event operations Lauren Wilson Head of event content Steven Wade Event manager Lucy Edwards Conference producer Anna Phillips Events manager Priscilla Lim Events co-ordinator Chloë Rutter
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Cover story video credit iStockphoto.com / Sefa Ozel
