Here are 3 companies that tie diversity goals to executive performance reviews

In late September, HR consulting firm Mercer published a report suggesting that companies committed to improving diversity, equity, and inclusion (DEI) should tie goals to executive performance reviews. While the concept is not new, it appears to be gaining popularity as organizations rush to finalize anti-racism protocols.

Mercer estimates between 15 and 20 per cent of S&P 500 companies currently tie DEI metrics to the salaries of higher-ups, helping organizations stay accountable and flexible while keeping executives invested in diversity and inclusion.

Here are three companies that have implemented the strategy.

STARBUCKS

On October 14, Starbucks announced it would “incorporate measurements focused on building inclusive and diverse teams into our executive compensation programs” beginning in the 2021 fiscal year. The company has unveiled an extensive DEI plan with annual goals based on recruiting and retention.

Starbucks also says it plans to achieve BIPOC representation of “at least 30 per cent at all corporate levels and at least 40 per cent at all retail and manufacturing roles by 2025.”

FACEBOOK

In July 2019, Facebook announced its intentions to have 50 per cent of its STEM workforce consist of individuals from historically-excluded groups by 2024.

The company has also made commitments to work with businesses owned by under-represented individuals.

“We committed to spend $1 billion with diverse suppliers in 2021, including $100 million with Black-owned businesses. From the launch of our supplier diversity efforts at the end of 2016, Facebook has now spent more than $1.1 billion cumulatively with U.S. companies certified as minority, women, veteran, LGBTQ, or disabled-owned (diverse suppliers),” the company says in its 2020 diversity report.

“In 2019 alone, Facebook spent $515 million with diverse suppliers in categories spanning creative services, network infrastructure, facilities management, and more.”

In July 2020, Facebook’s Chief Diversity Officer Maxine Williams told CNBC the company had begun evaluating how well executives fared with diversity and inclusion initiatives in their bi-annual reviews. Williams said it only affects VPs with organizations of a certain size but declined to say how large.

UBER

Uber began tying DEI goals to executive pay in July 2019. In its 2019 diversity report:

White men made up the majority of the company’s total U.S. workforce at 30.1 per cent.
Black women accounted for 5.3 per cent.
Black men accounted for 4 per cent.
Hispanic women accounted for 3.7 per cent.
Hispanic men accounted for 4.6 per cent.

It’s not clear if those numbers have improved, as Uber’s 2020 diversity report is not yet available.

The company has set up diversity goals for 2022. The success of those initiatives are tied to the compensation of several Uber senior execs, including CEO Dara Khosrowshahi, chief financial officer Nelson Chai, chief legal officer Tony West, and chief people officer Nikki Krishnamurthy, CNBC reports.