Nearly three quarters of investors expect executive compensation to be linked to ESG metrics. North American investors are the least committed to a link between executive pay and ESG, but even here more than six in 10 expect ESG metrics to influence management compensation.
Investors typically expect more than 10 percent of the executive compensation package to be linked to ESG metrics, with the median figure falling in the 10 percent to 14 percent range.
European investors have the highest expectations of the level of pay related to ESG, with 36 percent expecting more than a fifth of the executive package to be linked to ESG metrics.Fund managers and analysts on the buy side expect a higher link between ESG and executive pay than do sell-side analysts. Just under three in 10 buy-side professionals expect the proportion of ESG-linked pay to be less than 10 percent, compared with more than four in 10 on the sell side.
