Alphabet to Link Part of Executive Bonuses to ESG Goals Starting Next Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] Alphabet, Google's parent company, will link part of its senior executives' bonuses to achieving environmental, social, and governance (ESG) goals starting next year.

According to Bloomberg News, Alphabet plans to propose this agenda at this year's shareholders' meeting to seek shareholder approval. Alphabet's shareholders' meeting is scheduled for June 2.

John Hennessy, Chairman of Alphabet's Board, recently stated in a letter to shareholders that Alphabet will introduce a new bonus system starting next year. Chairman Hennessy emphasized, "ESG goals have long been a core part of Alphabet and Google's performance."

Hennessy also announced that the board has decided to establish principles and work on improvements related to workplace harassment and diversity issues.

This is interpreted as part of measures responding to recent concerns raised by some shareholders regarding human rights issues of Google employees.

Previously, Trillium Asset Management, a shareholder of Alphabet, submitted a shareholder proposal to have a third party evaluate the effectiveness of Alphabet's employee human rights protection policies. Trillium raised objections to Alphabet's employee human rights issues for two consecutive years, including last year. According to FactSet Research, as of the end of last year, Trillium held approximately 63,078 shares of Alphabet Class A stock, representing about 0.02%.

Chairman Hennessy announced plans to establish a new Diversity, Equity, and Inclusion Advisory Committee composed of Alphabet senior executives and external experts to improve corporate culture.

Meanwhile, many information technology (IT) companies will release their first-quarter earnings this week. Alphabet will announce its results after the New York Stock Exchange closes on the 27th.

With corporate advertising spending increasing again, Alphabet's performance is also expected to improve. Financial information firm FactSet Research forecasts that Alphabet's first-quarter revenue this year will increase by 25% year-over-year, exceeding $51 billion. Alphabet recorded a quarterly record revenue of $56.9 billion in the fourth quarter of last year.

Besides Alphabet, Tesla (26th), Microsoft, AMD, General Electric (GE), Starbucks (all on the 27th), Apple, Facebook, Ford, eBay (all on the 28th), Amazon, Twitter, McDonald's (all on the 29th), ExxonMobil, and Chevron (both on the 30th) will also release their quarterly earnings this week.

Apple and Amazon's revenues are expected to increase by 32% and 39%, reaching $76.7 billion and $104 billion, respectively. Facebook's revenue is forecasted to rise 34% to $23.7 billion.

FactSet Research expects the net income of S&P 500 companies to increase by 33.8% and revenue by 7.5% in the first quarter of this year. The projected net income growth rate of 33.8% is the highest since the third quarter of 2010.

This content was produced with the assistance of AI translation services.