Diageo removes ESG metrics from long-term executive incentives, shifting focus to financial performance
Diageo, the maker of Tanqueray gin, announced that ESG (environmental, social, and governance) measures will no longer be included as separately weighted elements in its long-term incentive plan for management, effective from its 2027 financial year. These ESG metrics previously made up 20% of senior executives' total long-term bonuses. The company will now primarily tie long-term rewards to financial metrics, reducing the performance measures from eight to three: earnings per share, cumulative cash flow, and adjusted return on invested capital. Diageo stated its commitment to ESG goals remains unchanged, with targets still embedded in its operational framework and monitored by the board.
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