Dave Curran, ESG and Law Institute executive director and co-chair of the Paul, Weiss ESG Advisory Practice, and Paul, Weiss executive compensation partner Jean McLoughlin wrote an article published in NACD Private Company Directorship on November 21. The article, “Tying Pre-IPO Compensation to ESG Commitments,” discusses the steps emerging, pre-IPO companies should take to develop an ESG-focused executive compensation program. Prior to an IPO, business leaders should ensure that the company has a holistic, strategic approach to ESG and establish mechanisms that will allow the company to tie compensation to ESG commitments in a measurable way.
“Don’t move too fast or follow the herd. Executive incentives work best when they are clear and consistent, and truly align with the overall goals of your company. Dive into what matters for your company and your industry, and then use executive compensation as a tool to make your ESG aspirations a reality,” the authors write.