US firms 'addressing sustainability through executive pay'

A growing number of US companies are choosing to tie executive compensation to the success or failure of their sustainability initiatives.

Industry expert Michael Meehan commented on this trend in an article for Forbes, noting that forward-thinking firms are using it to combine two of the corporate world's current "hot-button issues" - the remuneration of a company's directors and its environmental credentials.

Mr Meehan, a former adviser to the White House and founder of energy performance management company ENXSUITE, added that the concept is not confined to American organisations.

He said pay deals that are strongly linked to a firm's progress in terms of its sustainability goals are increasingly found in industries around the world.

"Companies are looking toward sustainability as a new way of measuring corporate success - and the financial motivations of their executives," he explained.

The expert said more customers, shareholders and regulators will demand such compensation structures as data on corporate sustainability becomes more widely available.