For environmental, social, and governance (ESG) measures, it’s been a year of ups and downs. Pushback against ESG by detractors has been countered around the globe by stakeholders—including investors and regulators—committed to understanding the relationship between corporate ESG initiatives and actual CEO performance. For a sixth consecutive year, The Global Governance and Executive Compensation Group (GECN) analyzed the executive compensation practices of 500+ of the world’s largest companies including the S&P/TSX 60 in Canada. In its just-released report, 2023 Global Trends in Stakeholder Incentives: The Staying Power of ESG, Southlea documents a now three-year worldwide trend for the largest corporations to incorporate stakeholder metrics into executive compensation.

Southlea’s conclusion: Linking executive pay to stakeholder incentives is here to stay. For boards of companies, the research provides important insights into how corporate pay is being aligned with stakeholder metrics to better assess management performance and accountability.

On an overall basis:

Other key takeaways from this year’s research include: