Human capital remains key feature in executive incentive plans despite ESG reframing, WTW study

Rhea-AI Summary

WTW (NASDAQ: WTW) reported on Jan 22, 2026 that human capital remains the most prevalent non-financial metric in executive incentive plans even as ESG measures are being reframed toward value creation.

Key findings: 76% of S&P 500 companies include at least one ESG metric in incentives (down 1% year-over-year); only 9% of those metrics appear in long-term incentives; globally 80% of companies use at least one ESG metric. Use of DEI metrics in S&P 500 incentives fell from 55% to 34% (a 21-point decline) and 23 companies (5%) disclosed plans to remove DEI metrics. People-related metrics remain common: 71% in North America and 81% in Europe.

Positive

• 76% of S&P 500 include at least one ESG metric
• 80% of global companies include at least one ESG metric
• People metrics used by 71% of North America companies
• People metrics used by 81% of Europe companies

Negative

• DEI metrics in S&P 500 incentives fell from 55% to 34% (21-point decline)
• Only 9% of ESG metrics are included in long-term incentive plans
• 23 S&P 500 companies (5%) disclosed plans to remove DEI metrics

NEW YORK, Jan. 22, 2026 (GLOBE NEWSWIRE) -- U.S. investors and the market continue to reframe environmental, social and governance (ESG) policies and initiatives to focus on sustainable and responsible business practices that drive business value creation. As a result, companies have refined their approach to executive incentive plans by establishing quality metrics that are aligned with stewardship of shareholder value, especially with a focus on human capital, according to a new global study by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. The annual study also revealed the prevalence of metrics related to diversity, equity and inclusion (DEI) declined in light of recent Court rulings and Executive Orders, yet human capital remains the most prevalent non-financial metric category in executive incentive plans.

Despite continued reframing, three-quarters of S&P 500 companies (76%) reported in this year’s proxies that they incorporated at least one ESG metric in their executive incentive plans, a 1% decline compared to last year. Only 9% of these metrics are included in the long-term incentive (LTI) plans.

Globally, 80% of companies incorporated at least one ESG metric in their executive incentive plan, a moderate decrease from the previous year. Three-quarters of global companies reported using ESG measures in their short-term incentive (STI) plans while 32% reported using ESG measures in their LTI plans.  

According to WTW’s study, the prevalence of metrics related to DEI dropped in the U.S. considerably as a result of Court rulings and policy shifts. However, based on disclosures filed in 2025, 34% of S&P 500 companies continue to pay a portion of executive incentives based on these metrics, a decline from 55% last year (a 21% decline). Furthermore, 23 (5%) of the S&P 500 companies disclosed plans to remove DEI metrics from their executive incentive plans for the current plan year. This trend is expected to continue as most companies do not disclose forward-looking changes to their incentive programs.

Human capital metrics remains a top business priority despite less emphasis on DEI. In North America, 71% of companies included at least one people-related metric while 81% of companies in Europe did. Some of the common people-related metrics in executive incentive plans include employee engagement, succession planning, culture and employee retention.

“The broad use of people metrics is consistent with the focus of boards as they continue to prioritize their role in the oversight and governance of people risks, investments and opportunities,” said Kenneth Kuk, senior director, Work and Rewards, WTW. “They are concentrating on developments in labor markets, skill shortages, employee retention, and labor costs, all of which they view are critical to company strategy and competitive advantage amidst geopolitical shifts and technology-driven business transformation.”

About the study

The WTW 2025 ESG Incentive Metrics Study is based on an analysis of 1,070 public company disclosures, including all constituents of major stock exchange indices in 18 markets with fiscal years ending between May 2024 and May 2025. Stock exchanges include the S&P 500, FTSE 100, TSX 60 and other major indices across Europe, Asia and Australia.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

Media contacts

Ileana Feoli:
ileana.feoli@wtwco.com

Stacy Bronstein
sbronstein@meritcomms.com

FAQ

What did WTW report on Jan 22, 2026 about ESG metrics in executive pay (WTW)?

WTW reported that 76% of S&P 500 companies use at least one ESG metric in executive pay and 80% of global companies do likewise.

How has the use of DEI metrics in S&P 500 executive incentives changed in 2025 (WTW)?

Use of DEI metrics declined from 55% to 34% in S&P 500 disclosures for 2025, a 21-point drop.

How common are ESG metrics in long-term incentive plans according to WTW (WTW)?

Only 9% of ESG metrics reported by S&P 500 companies are included in long-term incentive plans.

What people-related metrics are most cited in WTW's study (WTW)?

Common people metrics include employee engagement, succession planning, culture, and employee retention.

How many S&P 500 companies disclosed plans to remove DEI metrics in 2025 (WTW)?

23 S&P 500 companies, representing about 5%, disclosed plans to remove DEI metrics for the current plan year.

Does WTW say human capital remains a priority in incentives despite ESG reframing (WTW)?

Yes; WTW found human capital remains the most prevalent non-financial metric and a top board priority.