Also: A Paramount merger, Kotick steps down, and Modi defends India
Good morning.
If you want to know how serious companies are about climate, take a look at their executive pay practices. A new report from the Conference Board, out today, says 54% of S&P 500 companies now have climate metrics in their CEO pay plans. That’s up from just 25% in 2021.
Interestingly, the practice was most common with energy companies. The share of Russell 2000 energy companies using climate metrics in CEO pay calculations was 68%, up from 37% in 2021.
Diversity and inclusion metrics have also jumped. They were found in the pay plans of 75% of S&P 500 in 2023, up from 52% in 2021.
The study also found that incorporating ESG metrics into pay packages is much more common among big companies than small ones. In the Russell 3000, only 24% of companies with revenues under $100 million reported using ESG performance metrics, while the share rose to 83% for companies with revenues of $50 billion or more.
The report’s conclusion: The “ESG backlash, which has been mounting since early 2022, has not dissuaded companies from continuing to integrate ESG-related performance metrics into the incentive plans for their CEOs and senior executives.” Indeed, a full 76% of S&P 500 companies now include some measure of ESG performance in their compensation design (up from 66% in 2021.)
The Conference Board produced the study with FW Cook and ESGAUGE, and gave CEO Daily an early look. You can find the full report this morning here. And catch our year-end wrap-up on the Leadership Next podcast here. (In it, I disclose my favorite CEO interview of the year—apologies to all the others!)
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Warner Bros and Paramount
Warner Bros. Discovery is in preliminary merger talks with Paramount Global, according to sources with knowledge of the negotiations. Warner Bros. Discovery CEO David Zaslav has raised the idea with both Paramount chair Shari Redstone and CEO Bob Bakish. Both companies are struggling with the costs of running streaming services and a viewer exodus from cable TV. Bloomberg
Activision CEO steps down
Activision Blizzard CEO Bobby Kotick is stepping down at the end of the year, as Microsoft completes its acquisition of the video game publisher. Studio heads, like the president of “Warcraft” and “Diablo” developer Blizzard Entertainment, will now report directly to Microsoft executives. Kotick has led Activision since 1991 and steered its merger with Blizzard-owner Vivendi Games in 2008. He later courted controversy due to his dismissive attitude towards sexual harassment at the company. The Verge
Modi interview
Indian Prime Minister Narendra Modi is dismissing concerns that the country’s manufacturing sector won’t be able to replace China. “India wouldn’t have achieved the status of the world’s fastest-growing economy if the issues you’ve highlighted were as pervasive as suggested,” Modi said in an interview with the Financial Times. India surpassed China as the world’s most populous country this year, yet the country still struggles with persistently high unemployment. Financial Times
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CLO: Generative AI Uses and Risks In this CLO guide to Generative AI, chief legal officers learn how to navigate the benefits, challenges and legal risks this fast-growing technology may present for businesses. CLOs also have an opportunity to shape/influence its adoption. Read more.
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Check out this year's Impact 20 list |
These startups are making a difference for people and the planet. Fortune highlights 20 venture- and private equity-backed companies that are relying on the profit motive to solve social problems. Powered by the TPG Rise Fund. See the full list here |
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