For 2018, we decided to concentrate on executive pay, and particularly the inclusion of ESG criteria in the determination of variable executive compensation.
While we certainly see the inclusion of extra-financial criteria in the determination of executive pay as an essential component of effective governance, the weighting given to these criteria is just as crucial. We believe that the weighting should be significant, given that it reflects the importance the company attaches to CSR issues.
As a result of our engagement with companies, 76% now include extra-financial criteria when determining the variable component of executive pay.
Our impact was once again demonstrated in the case of Italian bank Intesa Sanpaolo, the target of repeated reminders from us of the importance of factoring extra-financial criteria into executive pay. In 2018, the company informed us that the topic had been included on the agenda of the Compensation Committee, which had reached an agreement in principle.