ESG to factor into executive compensation: Truist

Truist Financial Corp. said environmental, social and governance will be among the factors that the board of directors will evaluate in considering executive compensation in 2021.

In its second corporate social responsibility and ESG report released Thursday, Truist Financial said ESG has been added to its 2021 qualitative scorecard, a component of how it determines the annual cash bonus it pays executives.

Some 80% of Truist Financial’s annual incentive performance award rewards executives based on predefined financial performance measured by earnings per share (50%) and relative return on average assets (30%), the report said.

The quality scorecard, an assessment of performance on strategic priorities, makes up the remaining 20% of the bonus.

In addition to ESG, the other strategic priorities and categories on the scorecard that the board evaluates when assessing executive performance include merger of equals integration; broader financial performance and market results; technology; risk and compliance; COVID-19 response; and diversity, equity and inclusion.

Truist Financial also said in the report it would increase hiring from historically Black colleges and universities from 3% to 5% by 2023. Spending with diverse suppliers would increase to 10% by the end of 2022, it said.

Charlotte, North Carolina-based Truist Financial was formed by the 2019 merger of SunTrust Banks Inc. and BB&T Corp. Its insurance brokerage operation, Truist Insurance Holdings Inc. ranks No. 7 in Business Insurance’s latest ranking of the world’s largest brokers, with $2.43 billion in brokerage revenue in 2020.

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