Matthew's Thought Capital
The decision of whether a performance metric should be used in the short-term incentive plan or long-term incentive plan may impact its efficacy and ability to motivate plan participants. This article outlines considerations in determining whether the selected ESG metrics may be more appropriate for the short-term or long-term incentive program. The preceding article of our series addressed the different considerations when selecting what ESG metrics could be included in a compensation program, and the following article will discuss key considerations when determining the weightings of the selected metrics. While the focus of this series is on ESG metrics, we note that many of these principles can be applied to other types of metrics that companies may wish to implement in their incentive programs.