Linking CEO remuneration to ESG targets
Capital Monitor has unearthed how environmental, social and governance factors are being used to determine the pay of CEOs at the world’s 100 largest banks by asset size. While the results offer some promise, they show that remuneration often fails to account for the impact of the banks’ financing activities, and that transparency on pay is wanting.
Using the latest publicly available documents, Capital Monitor’s economics editor Chris Papadopoullos has analysed the world’s most influential banks by asset size and identified whether some form of ESG-linked remuneration for their chief executives has been applied. The data, compiled by GlobalData, looks at bonus targets set for CEOs and how well board assessments of CEOs are communicated – an indication of the quality of corporate governance. Although many financial institutions will be making positive ESG strides in their everyday business regardless of how a CEO is renumerated, we believe this is a key indicator of how serious a board is taking the subject.