At Mastercard, annual bonuses are based on several factors which make up a corporate score, a company representative told me. Up to 10% of the total corporate score represents how the company performed against ESG goals. Individual performance is the final component of the bonus calculation. This method is how executives were measured last year and will be used for the bonus calculations for all employees this year, the representative said.
I asked Alan Johnson, whose New York City consulting firm Johnson Associates advises major companies on pay, about this new approach. “I think [Miebach] is trying to send a good cultural signal of sharing in the success of all the goals,” he says. But can the average worker really influence, say, emissions? “It may not be motivational for most employees who don’t have a lot of visibility or control over these very important things. For most people, they’re pretty far away,” he says. He thinks a better approach could be to give one more measurable goal to all employees in an area where it makes sense. For instance, finance types could have “financial inclusion” be part of their score.
Fortune CFO Daily / April 27, 2022