The article examines the increasing trend of linking CEO compensation to climate-related goals among S&P 500 companies, a practice that has more than doubled in the past two years. It emphasizes the importance of setting science-based, measurable, and achievable climate targets as part of executive pay structures to ensure meaningful progress toward sustainability. The piece highlights different approaches companies are taking, such as focusing on emissions reductions within their operations or supply chains, and stresses the need for accuracy and accountability in reporting these metrics. The article also discusses the challenges and potential setbacks companies might face, advocating for flexibility in compensation plans to accommodate factors beyond executives’ control. Finally, it underscores the significance of substantial incentives in long-term compensation plans to motivate genuine and sustained actions toward reducing corporate carbon footprints.

https://www.wsj.com/business/climate-change-progress-ceo-pay-companies-4ec912e3