Alignment of incentives over time and across the investment value chain underpins expected future outperformance.
Companies must attract and reward leaders who create long-term value. The most effective pay structures align with a company’s strategy and objectives. Yet executive pay often prioritizes short-term targets, and shareholders focus on immediate returns when evaluating compensation plans. As a result, remuneration remains one of the most scrutinized aspects of corporate governance.
For investors, investment mandates are among the most crucial elements in ensuring that asset owners and the managers they work with both achieve their long-term objectives. Shaping mandates with incentive provisions specifically oriented toward long-term goals can help build stable, lasting investment partnerships.
Investor-Corporate Engagement | Article
Pay Me Now or Pay Me Later: The Sustainability J-Curve
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Report
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Companies need to reward leaders who create long-term value, but focusing on short-term returns as the primary metric in remuneration design keeps companies stuck in...
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Report
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The Risk of Rewards presents practical approaches that companies and their investors can use to frame their decisions about corporate executive remuneration to support long-term...
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Using the sustainability J-curve as a tool for visualizing strategies that may not pay off today, but will likely pay off over time, will promote...
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May 22, 2024
On 15 May 2024, FCLTGlobal joined the Pacific Pension Institute at its “PPI in Residence” salon in New York City to lead a discussion on...
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April 24, 2024
Artificial intelligence has already changed the way data is compiled and processed on a mass scale – and in particular in the investment industry, reshaping...
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Article
January 23, 2023
New rules from the SEC will require annual proxy disclosures centered around TSR, but is this the right metric to measure executive incentives and firm...
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Article
August 27, 2020
Some long-term investors are ready for companies to depart from the pay-for-performance status quo, but the jury is still out on the method that many...
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Article
August 17, 2020
FCLTGlobal researchers sat down with MIT Senior Lecturer Robert Pozen to discuss potential ways to implement a change in corporate pay.
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Article
July 28, 2020
FCLTGlobal will research new ways in which short-term, status-quo compensation practices can be restructured to enhance long-term value creation.
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Article
January 30, 2020
Ontario Teachers’ scales several long-term mandate provisions across the fund and pilots many others.
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Podcast
May 22, 2023
Carine Smith Ihenacho, Chief Governance and Compliance Officer at Norges Bank Investment Management, joins the podcast to discuss what responsible investment means to NBIM, the...
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Podcast
May 16, 2022
“In our experience, the great CEOs are not just driven by their compensation. They are driven by a need to succeed, a need to accomplish...
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Podcast
November 22, 2021
What makes a long-term CEO? Clarke Murphy (Russell Reynolds Associates) joins the podcast to discuss the attributes that make executive leaders effective at driving long-term...
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In the News
July 1, 2021
“The first step towards a more effective monitoring approach is to recognise that short-term performance data are at best a weak indicator of success for...
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Toolkit
March 8, 2021
These tools empower companies to tailor long-term remuneration by replacing some elements now, reflecting on their long-term needs, and finally by using key decisions to...
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Video
January 28, 2020
From the EY panel at the World Economic Forum Annual Meeting in Davos, FCLTGlobal CEO Sarah Keohane Williamson discusses 4 "levers" to move from short-term...
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