CEO Pay and the Reduction of Carbon Emissions Go Hand in Hand

By Friso van der Oord


Carbon Emission Executive Compensation Online Article

The below is an excerpt of an article originally published by CNN.

Despite decades of reform efforts by regulators, shareholders, and the independent director community, CEO pay continues to grow inexorably, far outpacing any gains to workers’ pay.

Since 1993, the National Association of Corporate Directors (NACD) has said that CEO pay should be more in line with what other employees receive. Boards, we have said, should not approve pay plan elements that result in unexpectedly high compensation, such as mega stock-option awards, and plans should be expressed simply, so that shareholders know what to expect when targets are met and pay is reported.

But despite our admonitions, today’s typical CEO pay packages (the ones shareholders vote up or down as they have their “say on pay” each spring) are long documents full of initialisms justifying pay that can rise as high as hundreds of millions of dollars per year.

To continue reading this article, in which NACD senior vice president of content Friso van der Oord discusses the importance of—and opportunity in—tying CEO pay to carbon emissions reduction, visit CNN Business here. For more information about NACD’s work to promote climate governance, check out our US Climate Initiative.

Friso van der Oord
Friso van der Oord is senior vice president of content at NACD.