Using compensation to drive action on diversity, equity and inclusion 

The last six months have been eye-opening for many corporate stakeholders, as 2020 has brought a long-overdue change in how companies approach diversity, equity, and inclusion (DEI).

Your company may be grappling with many new questions around DEI—as employees, customers, board members, and other stakeholders seek action and accountability. The dual-lens of COVID-19 and the recent murders of George Floyd, Breonna Taylor, and other Black Americans have highlighted profound social justice and economic divides in the US. As a result, companies are revisiting their records on DEI, and their responsibility to help shift a status quo stacked against Black, Indigenous, and other People of Color (BIPOC), as well as other often underrepresented populations.

This link between compensation and DEI is still a relatively infrequent practice. Mercer estimates that only 15%-20% of S&P 500 companies include DEI metrics in their executive incentive plans. Only about 5%-10% of those companies have an objective, quantitative DEI metric, while many other companies include DEI goals and accomplishments as part of subjective individual or strategic performance metrics.

Download the full article to uncover the six questions companies must consider when designing DEI goals for executive incentive plans.