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.
Report
September 26, 2023
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
July 19, 2022
FCLTGlobal has conducted research since 2015 to facilitate the creation of mandates that align asset owners and asset managers long-term goals.
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Report
March 8, 2021
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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Article
July 31, 2024
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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Article
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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Article
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
May 10, 2021
Most retirement systems have failed to grow and safeguard the savings of men and women equally. But there are a number of strategies that can...
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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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January 24, 2020
MFS takes action on the order of data, references to benchmarks, and inclusion of turnover.
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Article
September 23, 2019
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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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Podcast
October 12, 2021
The head of CDPQ joins the podcast to discuss the organization's unique "double mandate" - providing long-term financial returns for depositors and providing constructive capital...
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Podcast
June 28, 2021
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In the News
May 31, 2022
The world is approaching an inflection point on climate investing, says the Asia-Pacific chair of one of the world’s largest asset managers, with developments on...
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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
September 26, 2023
This toolkit provides a draft engagement letter investors can use to open dialogue with boards on potential misalignment between executive pay duration and long-term strategy....
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Toolkit
September 26, 2023
This toolkit provides a structured framework for evaluating executive pay proposals through a long-term investor lens. Using the H-QTIP matrix, it highlights the governance, performance,...
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Toolkit
September 26, 2023
This toolkit outlines practical steps companies and boards can take to strengthen long-term alignment between executives, shareholders, and organizational strategy. Through clear “stop” and “instead”...
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Toolkit
September 26, 2023
This toolkit explains how to calculate and interpret pay duration as a way to assess whether executive incentives align with a company’s long-term strategy and...
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Toolkit
September 26, 2023
This toolkit explains how to calculate and interpret pay duration as a way to assess whether executive incentives align with a company’s long-term strategy and...
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Toolkit
July 19, 2022
This matrix provides a menu of key contract provisions for mandates. We compare typical provisions, which tend to reflect a short-term mindset, to those promoting...
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Toolkit
July 19, 2022
Grouped among key areas of governance, incentives, metrics, and engagement, the onboarding checklist allows for effective communication between the asset owner and manager and sets...
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Toolkit
July 19, 2022
While a meeting schedule is typically agreed at the start of a relationship, the manager scorecard can be completed at any point during the relationship....
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Toolkit
July 19, 2022
Finding the right manager is crucial to developing a successful relationship—this list of questions can help asset owners select managers that are capable of investing...
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Toolkit
May 10, 2021
Identifying the links between management behaviors and long-term business performance
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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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Toolkit
September 28, 2016
This toolkit outlines ten essential elements that underpin a credible and effective long-term corporate strategy. From clarifying purpose and competitive advantage to aligning metrics, capital...
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