January 27, 2022 Executive Compensation ESG & Human Capital Management Articles

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ESG & Human Capital Management

Reevaluating Executive Compensation to Meet Stakeholder Needs

In 2018, a large manufacturer gave its top executives incentives focused on the usual investor-centric metrics, including revenue and profitability growth.

Three years later, after several accidents that killed hundreds of customers, shut down factory lines, and triggered a shareholder lawsuit, the company fired its CEO and began the process of overhauling its culture. Giving inadequate priority to safety and quality contributed to lost sales and severe reputational damage, not to mention the lives lost.

Executive compensation was one of the many programs that was revamped in the cultural shift to emphasize safety. Modifications made to incentivize safety, in addition to financial performance, were a crucial signal of the company’s new commitment… (cont)

View the full article as it was originally published.

Seymour Burchman

Blair Jones

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