{"id":535,"date":"2023-12-06T17:09:56","date_gmt":"2023-12-06T16:09:56","guid":{"rendered":"https:\/\/frontisgovernance.wordpress.com\/?p=370"},"modified":"2025-07-23T10:25:40","modified_gmt":"2025-07-23T08:25:40","slug":"esg-strategy-vs-esg-pay-analisi-sullallineamento-delle-remunerazioni-del-top-management-con-le-strategie-esg","status":"publish","type":"post","link":"https:\/\/frontisgovernance.com\/en\/esg-strategy-vs-esg-pay-analisi-sullallineamento-delle-remunerazioni-del-top-management-con-le-strategie-esg\/","title":{"rendered":"ESG Strategy vs. ESG Pay: Analysis on the alignment of top management remuneration with ESG strategies"},"content":{"rendered":"<p class=\"wp-block-paragraph\">La <a href=\"https:\/\/www.ermessapienza.it\/\">university start-up ERMES Srl<\/a> Sapienza University of Rome, in collaboration with Frontis Governance, has carried out an analysis on the alignment between the incentive plans of CEOs and the sustainability strategies of major Italian companies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Within the regulatory framework outlined by the Shareholders' Rights Directive (SRD II) and the Corporate Governance Code, the issue of remuneration emerges as a crucial tool for aligning the interests of companies and their directors, contributing to sustainable long-term success for all stakeholders.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The primary focus of ERMES and Frontis Governance's research is therefore to explore<strong> to what extent the CEO, as the primary person responsible for business management, is actually incentivised to pursue ESG sustainability objectives<\/strong>. For this purpose, the study focuses exclusively on variable remuneration plans, both short and long-term, verifying whether the parameters used to assess incentives are consistent with the sustainability strategy communicated by the company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The analysis was conducted on a dual basis: firstly, how many strategic ESG objectives are considered in incentive plans, and secondly, the weight these objectives have on the total variable compensation of CEOs. The companies analysed were then grouped into 5 macro-sectoral clusters that exhibit the most homogeneous characteristics possible in terms of business and sustainability themes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Over half of the companies analysed (28 out of 40) show substantial alignment<\/strong>with at least 50% of strategic ESG objectives also included in the incentive plans. In addition, <strong>15 companies have been identified as \u201cbest in class\u201d<\/strong>, because, as well as demonstrating a high degree of alignment, they link at least 20% of total variable remuneration to the achievement of ESG targets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The analysis also highlighted <strong>significant differences depending on the sector of activity<\/strong>, with Energy and Utilities showing the highest degree of alignment, against Consumer Discretionary and Healthcare showing alignment and the weight of ESG objectives being lower on average than market practices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Looking at the international context, Italy is confirmed to be among the markets where companies appear most sensitive to ESG issues, integrating them substantially into top managers' incentive plans. However, the study highlights that there is still significant room for improvement, especially in sectors that appear more exposed to sustainability issues for which definitions and measurement methodologies are not yet standardised, such as social issues.<\/p>","protected":false},"excerpt":{"rendered":"<p>La startup universitaria ERMES Srl della Sapienza \u2013 Universit\u00e0 di Roma, in collaborazione con Frontis Governance, ha realizzato un\u2019analisi sull\u2019allineamento tra i piani di incentivazione dei CEO e le strategie di sostenibilit\u00e0 delle principali societ\u00e0 italiane. Nel quadro normativo delineato dalla Direttiva sui diritti degli azionisti (SRD II) e dal Codice di Corporate Governance, il [&hellip;]<\/p>","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,15],"tags":[94,56,58,103,92,82,106],"class_list":["post-535","post","type-post","status-publish","format-standard","hentry","category-news","category-remunerazioni","tag-best-practice","tag-bonus","tag-compensi","tag-esg","tag-frontis-governance","tag-remunerazioni","tag-sostenibilita"],"acpt":null,"_links":{"self":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/comments?post=535"}],"version-history":[{"count":1,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/535\/revisions"}],"predecessor-version":[{"id":757,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/posts\/535\/revisions\/757"}],"wp:attachment":[{"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/media?parent=535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/categories?post=535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frontisgovernance.com\/en\/wp-json\/wp\/v2\/tags?post=535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}