The CEO of Palantir Technologies, Alex Karp, recently made headlines as one of the highest paid chief executives of a publicly traded U.S. company. But Karp’s compensation was not solely in cash—the sizeable $6.8 billion figure refers to “compensation actually paid,” the annual increase in the value of an executive’s current and potential stock holdings. Like most chief executives, the majority of Karp’s compensation takes the form of stock, stock options, and other investment vehicles.

Executive compensation plans are typically incentive based, calculated from metrics such as the economic performance of the corporation. But the rise of environmental and social governance (ESG) shifted the priorities of corporate governance. For example, Apple CEO Tim Cook’s 2024 pay package was tied to his performance on ESG criteria, putting Apple at the forefront of a growing cohort of companies expanding their executive performance benchmarks to include non-economic metrics. READ MORE