DEI metrics in executive short term incentive plans at S&P 500 companies
- Over the last several years, companies have increasingly used ESG metrics in their incentive plans. Diversity, equity and inclusion (DEI) metrics tend to be the most prevalent of these metrics. In 2023, for instance, about 50% of S&P 500 companies used a DEI metric in their incentive plans.
- Recent judicial decisions may have created some uncertainty on the usage of DEI metrics. We have found that companies in the S&P 500 have made some adjustments on how they utilize DEI metrics, but it has not resulted in any significant decrease in their usage.
- ESG metrics continue to be predominantly used in STI plans at S&P 500 companies, with little YoY change over the last four years. Since 2020, of companies that use DEI metrics in incentive plans only about 6%, on average, use them in an LTI plan.
- As a result, the data in charts 1 and 2 are focused on only STI plans.
Diversity, equity and inclusion (DEI) metrics in executive incentive plans at S&P 500 companies
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