Papa John’s Ties Incentive Compensation to ESG Performance
Pizza chain Papa John’s International announced that it will begin linking eligible team members’ and executives’ annual bonuses to performance and progress on the company’s ESG goals.
Papa John’s’ initiative is part of a growing trend among companies across a wide range of industries to link compensation to ESG progress, including similar moves at UBS, Caterpillar, Apple and Trane, among several others. Last month, Mastercard announced that it would extend its compensation model tying bonus pay to ESG goals to all of the company’s global employees.
The initiative was announced by Papa John’s with the release of the company’s 2021 Corporate Responsibility Report, highlighting the company’s ESG initiatives and progress. The report contains more details on the updated compensation plan, which involves adding an ESG metric to the Papa Johns Management Incentive Plan (MIP), which is aimed at rewarding team members for helping to drive business performance and for supporting the company’s main business strategies.
The ESG metric will be evaluated by progress towards a portfolio of ESG priorities, chosen by a materiality assessment conducted by the company, and include initiatives related to advancing diversity, equity and inclusion, enhancing reporting and identifying opportunities to address environmental impact, and furthering the company’s better ingredients commitments, which includes eliminating preservatives, MSG, high-fructose corn syrup, and palm oil.
The report also highlighted several areas identified as priority areas by the materiality assessment, including sustainable packaging and materials management, sustainable agriculture, reducing food waste through the company’s operations and supply chain, and reducing greenhouse gas emissions.
Rob Lynch, President and CEO of Papa John’s, said:
“As Papa Johns continues to grow, we remain focused on priorities that set us up for long-term success and create a positive impact on the world around us. We are proud to be among the few companies in our industry linking incentive compensation with achieving ESG initiatives. Taking this step emphasizes the importance we have placed on corporate responsibility.”