Diageo Removes ESG Metrics From Long-Term Executive Rewards
In its annual report, Diageo announced that it will no longer include environmental, social, and governance (ESG) measures as separately weighted elements in the long-term incentive plan for senior executives. Previously introduced in 2020 under the 'Spirit of Progress' ESG program, these metrics had accounted for 20% of total long-term bonuses but are now being reduced to focus more on financial performance indicators such as earnings per share and cash flow. The change is part of a broader revision that reduces the number of performance measures from eight to three. While ESG targets will no longer directly influence vesting in the long-term incentive plan, Diageo emphasized its continued commitment to these goals through ongoing monitoring and reporting. The company also noted that relative total shareholder return would be removed but remain embedded within reward frameworks. Diageo's remuneration committee chair Susan Kilsby stated that ESG priorities have become integral to business operations despite their removal from the incentive structure, with relevant leaders still expected to meet appropriate ESG objectives as part of annual incentives.
Tickers: $DEO