I think you will agree that the past 18 months will be forever etched in the history books. As stakeholder prominence continues to gain traction, many corporations have worked hard to meet the needs of employees, customers, suppliers and the communities where they do business.
Still other companies are experiencing increased pressure this proxy season from shareholder proposals and activist investors. Possibly the most notable examples this year are the challenges facing three of the world’s largest oil companies. Exxon Mobil, Chevron and Royal Dutch Shell have all been rebuked in various ways this proxy season regarding the environmental impact of the industry and their overall failure to address climate change in a measurable, definitive way. Exxon Mobil faced a proxy fight which, for the first time, teamed institutional and activist investors, resulting in an unprecedented three board seats for the activist hedge fund Engine No 1. In addition, Chevron and Shell faced climate pressures this month. Chevron’s shareholders voted against company management on a key climate proposal, while a Dutch court ordered Royal Dutch Shell to take much more aggressive action to drive down its carbon emissions.
While these challenges are notable due to Oil and Gas companies historically enjoying the support of shareholders, the phenomenon is not unique. Management and directors across sectors should be reading the tea leaves – business as usual is not going to cut it anymore.
Companies that don’t proactively manage their businesses with sustainability and a clear measurable path to carbon reduction will face shareholder pressure while those that do will reap the rewards. To that end, I recently spoke with Anisa Kamadoli Costa, Chief Sustainability Officer of Tiffany & Co., on how Tiffany’s singular focus on sustainability has benefited the communities, the environment and customers along its value chain.
More than two decades ago Tiffany & Co. became a vocal advocate for responsible mining and traceable supply chains. Since then, they have established a foundation focused on all elements of stakeholder value. And it has paid off. Tiffany & Co. seems to have the Midas touch in business and continues to make a positive impact on sustainability and the industry at large. I encourage you to read my “Breakfast at Tiffany’s” interview with Anisa below.
Wishing you a great Fourth of July weekend and hope you have an opportunity to celebrate with friends and family.
Sincerely, Robin Ferracone
Sincerely,
Robin Ferracone
Farient on Business Sustainability
This Luxury Brand Means Business in Sustainability Governance, Accountability, and Oversight
Recently, through my not-for-profit board work at WildAid, I had an opportunity to interview Anisa Kamadoli Costa, Chief Sustainability Officer of Tiffany & Co., on Tiffany’s leadership on sustainability efforts, social impact, and oversight.
In the Year of the Stakeholder, companies are taking action on social issues. This WSJ article includes Farient’s analysis that highlights the one-third of S&P 500 companies that disclose a diversity measure in their compensation structures or mentioned diversity in explaining executive pay.
Big Payouts to Top Brass Reveal ‘Naked’ Boards, Say Investors
Last year, CEO compensation rose by the largest margin in almost a decade, despite a global health crisis that hurt the economy. A Farient analysis in Agenda Week suggests this may have triggered investor backlash at marquee brands.
Coronavirus Crisis Dents Salaries, Not Stock Awards, for Many CEOs
Although 2020 was a banner year for executive pay, many executives took cuts in salary during the pandemic. Now, as I suggest in this Wall Street Journal article, the question is not “how much of an increase are we giving over the normal salary?” It’s “when do we even restore the old salaries?”
Robin is our Founder and Chief Executive Officer. She is the author of the book, Fair Pay, Fair Play: Aligning Executive Performance and Pay, and a frequent presenter for well-known organizations. Robin has written extensively on the topics of performance management, incentive plan design, goal-setting and corporate governance. For ten years, Robin has been named to the NACD Directorship 100, a list of the most influential people in corporate governance and the boardroom. She has been quoted by numerous business and industry publications, including The New York Times, The Wall Street Journal, and The Washington Post. Learn more about Robin.
About Farient
Farient Advisors LLC is an independent executive compensation, performance, and corporate governance consultancy. Farient provides a comprehensive array of services to boards of directors and management, including compensation program design, performance measurement and goal-setting, pay and performance alignment, board of directors’ compensation, and shareholder communications, among others. Farient is located in Los Angeles, New York, Louisville, and Dallas and is a founding partner of the Global Governance and Executive Compensation Group (GECN Group), serving clients throughout the world. Farient is recognized by the Women’s Business Enterprise National Council as a certified diverse company.
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