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Excessive CEO pay sets a dangerous precedent for business and society – Triodos Investment Management

Unchecked remuneration packages are more than just a corporate issue - they are a ticking time bomb for business stability and even democracy.

Posted on Feb 27, 2025

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... Excessive executive remuneration has become a critical issue, not just for businesses but for society as a whole. Inflating CEO salaries, especially through complex bonus structures and stock options, exacerbate wealth inequality.

A striking example is the staggering USD 56mn bonus recently approved by shareholders to Tesla CEO Elon Musk. Investment Analyst Lilia Feghiu and Associate Fund Manager Fabian Meijs advocate for balanced and fair remuneration.

A long-term approach to executive compensation should also incorporate environmental, social and governance (ESG) factors. Triodos IM has been pushing to integrate ESG factors into executive pay structures. “Any reward structure should be based on ESG metrics,” Lilia Feghiu emphasises. “We want executives to focus on long-term, sustainable value creation – not just the next quarterly report.”

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