Compensation Advisory Partners conducted a pulse survey to obtain a sense of if, and how, organizations are incorporating diversity and inclusion (D&I) objectives in their incentive compensation plans. The survey was conducted late December 2020 into January 2021. The 43 survey participants have median revenue of approximately $10B and were primarily public companies (72%) with some private, for-profit representation (28%).

Survey Highlights

Over 75% of respondents have articulated their company D&I objectives and most companies have already communicated those objectives to their Board of Directors

We asked if those D&I objectives are currently being used or if there is a plan to use them in incentive plans in the future. Practice among the participants was roughly equally split:

• About 1/3 of companies currently use D&I objectives in their incentive plans
• Another 1/3 are considering measuring D&I in their incentive plans in the near future
• The balance of participants do not have plans to incorporate D&I metrics in their incentive plans

Of the companies that include D&I goals in incentive plans:

• All included these goals in the annual incentive program. One participant used D&I goals in both the annual and long-term incentive programs
• The goals most often apply to senior management; less than 15% responded that all incentive plan participants are tied to D&I objectives
• The most common measures used by the respondents included representation of certain demographics and adoption of human resources practices to support D&I
  • Additional measures include tracking inclusion through employee engagement surveys, monitoring promotion practices among diverse groups, and promoting D&I by encouraging and supporting employee resource groups (ERGs)
• The respondents most often set quantitative (70%) D&I goals in their plans; however, there were not sufficient responses to determine if the goal achievement vs D&I goals was formulaic or discretionary

Our team is available to answer questions related to diversity and inclusion measures in incentive compensation. Please contact us for further discussion:

Kelly Malafis
Founding Partner
[email protected]
212-921-9357

Roman Beleuta
Principal
[email protected]
646-532-5932

Zaina Jabri
Senior Analyst
[email protected]
713-559-2724