Posted in: news

11th January 2015

Alcoa: Using Executive Bonuses to Drive Sustainability

Alcoa is the world's third largest producer of aluminum and has been linking 20 percent of its executive bonuses to sustainable metrics, since 2010. In 2013 Alcoa adjusted their policy to tackle three specific areas of their business. They directly linked 5% of bonuses to reduced CO2 emissions, 5% to safety improvements and 10% to creating a more diverse workforce.

Alcoa believes that their compensation programs help to integrate sustainability into their core business strategy and to motivate their executives to take actions that are best for the long-term performance of the company, while also delivering positive annual results. An analysis of Alcoa's executive payouts in 2013 suggests that these incentives have been prosperous. Alcoa awarded 7.4% of its bonuses for safety improvements and 11.5% for diversity hiring, exceeding its goals on both counts.Alcoa is extremely transparent about their compensation schemes, and publish detailed information on them in annual proxy statements.

A breakdown of Alcoa's compensation framework is available here.