HOW COMPANIES INCORPORATE ESG METRICS IN COMPENSATION PLANS.

The following companies have implemented ESG metrics and made disclosures in their 2022 proxy statements.

ANNUAL INCENTIVE PLANS

* The Chemours Company. The Chemours Company modified its short-term annual incentive plan (AIP) for 2021 "to ensure that management's incentives were aligned with emerging important business metrics." The company shifted the metric mix with the addition of ESG metrics. The ESG metrics are weighted 15%--introducing gender diversity was assigned a 9% weight and environmental projects was assigned a 6% weight. With regard to the 2021 AIP result, the company stated that it "achieved the maximum performance on the environmental projects, but failed to meet the threshold for increasing the percentage of women in the company."

* The Walt Disney Company. Disney's compensation committee developed "Other Performance Factors" for the fiscal 2021 annual bonus in December 2020. For fiscal 2021, these other factors were part of the company's strategic objectives and emphasized the importance of one of the company's priority ESG issues: diversity and inclusion. It was assigned the highest weighting among the other performance factors. This ESG metric, together with the Other Performance Factors, was a 30% multiplier of the targeted amount.

* Dow. Dow's annual cash incentive program is designed to reward employees for achieving Dow's most critical financial and operational goals. The proxy statement said, "Based on feedback from investors, benchmarking, management's recommendation and input from the independent compensation consultant, the committee determined that operating EBIT, free cash flow and ESG metrics were aligned with the company's stated goals to its stakeholders, including employees and stockholders." For the 2021 performance award, the ESG metric (customer experience, sustainability, inclusion) was 20%. With regard to its 2022-2024 performance share program design, "based on feedback from investors, benchmarking, management's recommendation and input from the independent compensation consultant, the committee determined that including ESG metrics in the 20222024 performance share program to drive performance on sustainability targets and carbon and climate goals was aligned with the company's stated goals to its stakeholders, including employees and stockholders. The 2022 program design includes enhancements that align with Dow's stated goal to achieve carbon neutrality by 2050 through increasing its positive...