Beginning this year, achieving ESG goals will now factor into bonus calculations for all employees, Mastercard CEO Michael Miebach recently announced. Last year, it was only linked to the compensation of senior executives, EVPs and above. 

Mastercard “either met or exceeded our goals,” and now employees will all take the company’s “shared accountability and progress to the next level,” Miebach said in the announcement. “While our global efforts go much broader and deeper, we’re tying compensation to emissions, financial inclusion, and the gender pay gap because we have a substantial impact in these areas and because they closely align with our vision,” he wrote. “Each and every one of us shares the responsibility to uphold our ESG commitments.”

At Mastercard, annual bonuses are based on several factors which make up a corporate score, a company representative told me. Up to 10% of the total corporate score represents how the company performed against ESG goals. Individual performance is the final component of the bonus calculation. This method is how executives were measured last year and will be used for the bonus calculations for all employees this year, the representative said.

I asked Alan Johnson, whose New York City consulting firm Johnson Associates advises major companies on pay, about this new approach. “I think [Miebach] is trying to send a good cultural signal of sharing in the success of all the goals,” he says. But can the average worker really influence, say, emissions? “It may not be motivational for most employees who don’t have a lot of visibility or control over these very important things. For most people, they’re pretty far away,” he says. He thinks a better approach could be to give one more measurable goal to all employees in an area where it makes sense. For instance, finance types could have “financial inclusion” be part of their score.

Many companies have been feeling the pressure from boards and investors to reach ESG goals, he says. And most recently, the U.S. Securities and Exchange Commission released pending mandatory climate-risk disclosures that would require compliance as soon as fiscal 2023 for the largest public companies.

Mastercard is certainly not alone. The percentage of U.S. companies that included some type of environmental or social metric consideration within their executive incentives has increased from 16% in 2019 to 21% in 2020, and 25% in 2021, according to a study by proxy advisory firm Glass Lewis & Co. “Of the $6.96 billion paid to S&P 500 CEOs in 2021, at minimum nearly $600 million (8.6%) was based on [environmental and social] performance,” according to the firm’s report. 

ESG pressure on companies is “enormous,” Johnson says. How is your company measuring up?

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

Virtual care is positioned to become an essential and long-lasting feature of employers’ health care offerings, according to a new report by WTW (Willis Towers Watson, NASDAQ: WTW). By the end of 2023, about 95% of employers surveyed are expected to offer virtual care for medical and behavioral health issues. Regarding challenges in delivering an effective strategy in the next two years, 73% of employers named increasing health care prices due to rising inflation and provider consolidation. The findings are based on a survey of 636 U.S. employers, Respondents employ 10 million workers.

Going deeper

Warning: Even Your Committed Employees Are Being Recruited, a report by Gallup, "highlights a new reality that most employers are not fully prepared for." In the past three months, one in four U.S. employees said they have been recruited. And even though they're not actively looking for a new job, one in 10 employees said they have been recruited in the past three months, Gallup found. 

Leaderboard

Annie Pham was named CFO at authID.ai (Nasdaq: AUID), a provider of mobile, biometric identity authentication solutions, effective in June, following the planned retirement of Stuart Stoller, who has served as authID’s CFO since 2017. Pham has served in senior finance leadership roles in the technology sector, most recently at SonicWall, Inc, where she served as VP and chief accounting officer from 2017 to the present. She previously served as VP of Finance at Applied Micro Circuits Corporation.

Ana Schrank was named the first CFO at Truepill, the digital health platform. Schrank joins Truepill after serving as CFO at Collective Health, where she led all finance, strategy, and analytics functions. Prior to Collective Health, she spent 23 years at McKesson Corporation, where she served in crucial positions such as CFO of McKesson Connected Care & Analytics, chief audit executive, and VP of investor relations.

Overheard

"Wanting to help amid a growing crisis but not knowing how is a confounding position for business leaders to find themselves in. Yet that’s happening more and more as professional and personal identities blur, catalyzed by the pandemic. I know because I’m experiencing this myself right now amid continually rising anti-Asian hate incidents and crimes, despite the efforts to #StopAAPIHate."

—Anne Chow, the CEO of AT&T Business, writes in a Fortune opinion piece.