Diageo has announced that ESG measures, including responsible drinking and sustainability targets, will no longer be part of the long-term incentive plan for its executives, with bonuses now tied primarily to financial metrics. In its annual report, remuneration committee chair Susan Kilsby stated that these measures will not be separately weighted in the long-term incentive plan, which typically vests over three years. The revised policy, effective from fiscal year 2027, also removes relative total shareholder return from the scheme. ESG metrics, introduced in 2020 and previously comprising 20% of long-term bonuses, will remain embedded in the reward framework, and the company will continue to report on ESG performance. The number of performance measures in the long-term plan is reduced from eight to three, focusing on earnings per share, cumulative cash flow, and adjusted return on invested capital, while annual incentives will still consider net sales growth, operating profit growth, and individual objectives.
Diageo PLCDiageo removes ESG metrics from executive long-term incentives, shifting focus to financial metrics; impact on company performance unclear.
