Some companieshave begun to reward top executives for making their companies moreenvironmentally friendly, Financial Weekreports.
At least four Fortune 500 companies have taken steps to align a portion of theirexecutives’ compensation with broader corporate initiatives to reduce pollutionand find ways to run more energy-efficient operations. The shifts may mark thebeginning of a trend to link executive pay to environmental goals.
“I supposeit’s the concept of “never measured, never managed’ at work here,” BethYoung, senior research associate at The Corporate Library told FW. “Incentivesshape behavior, so if this is an important strategic issue for a company, itshould be benchmarked in executive pay.”
Among thecompanies that currently include environmental metrics in their executivecompensation packages are American Electric Power, Xcel Energy, AlleghenyTechnologies and NRG Energy. Each ties a portion of its executives’ annualincentive plans to a factor such as “environmental improvements,” a term usedby Pittsburgh-based specialty metals company Allegheny in its most recent proxyfiling, for example.