Strategic CSR - Executive pay

Another indication that the ESG fad has run its course (and was always a distraction) is the decoupling of executive pay from specific associated metrics:

"Two years ago, many of America’s largest companies began stripping diversity targets out of executive pay packages. Now, environmental measures—including goals tied to climate emissions—are beginning to face a similar fate."

In particular, the article in the url below highlights a more recent decision by Apple: 

"Apple Inc. quietly dropped a so-called 'ESG modifier' from its 2025 pay packages for Chief Executive Officer Tim Cook and other top executives, according to a corporate filing last month. The provision, in place since 2021, had allowed Apple’s board to adjust annual bonuses up or down by as much as 10% depending on the company’s performance on a variety of measures, including greenhouse-gas reductions and renewable energy use among suppliers."

But, Apple is not alone:

"Apple’s move follows similar decisions at dozens of companies, including Starbucks, Salesforce, Mastercard and P&G, which have recently weakened or severed ties between environmental performance and the size of their executives’ paychecks."

As a result, the more important underlying principle, the need to align compensation with the most essential performance metrics, is being lost due to the shallowness of the ESG discussion:

"The shift is beginning to show up in the numbers. The share of S&P 500 companies tying executive compensation to environmental metrics fell to 46.7% in 2025, down from a peak of 52.6% two years earlier."

Ultimately, in spite of the good intentions driving the ESG 'movement,' the rush to establish it opened the door to easy criticism, and therefore setback the conversation, because it was so ill-thought-through.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

 

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Apple Drops ESG Links From Top Executives' Pay Packages

By Ben Elgin and Jeff Green

February 18, 2026

Bloomberg

https://www.bloomberg.com/news/articles/2026-02-18/apple-quietly-unlinks-environmental-performance-from-pay-packages