ESG metrics are increasingly used to shape executive compensation packages, but firms still struggle to find the right balance.

More than half of the S&P 500 now has incorporated ESG goals into their executive incentive compensation programs. Despite this widespread use, many companies still struggle with the nature and number of goals to include, as well as what weighting to give them relative to other key executive priorities. Challenges with evaluation and transparency are also common.

Navigating this environment first requires an understanding of the current state of pay. Here, the key issues around ESG in executive packages will be discussed, including crit....