Earlier this month Ernst & Young pointed out that diversity, equity and inclusion considerations by Boards of Directors’ compensation committees at S&P 500 companies fell significantly this year:
DEI is disappearing as a compensation committee responsibility. In recent years, it became commonplace to see diversity, equity and inclusion (DEI) listed among human capital matters overseen by compensation committees. That changed this year. We’ve observed a 76% drop in S&P 500 companies that mention DEI-related terms in descriptions of their compensation committee’s responsibilities. Of those, most have removed the term altogether, though 17% changed it to “inclusion,” indicating a reorientation.
Now today, in a report published by the Harvard Law School Forum on Corporate Governance, The Conference Board reports that explicit disclosure “of DEI-linked executive pay incentives declined sharply in 2025 amid legal and reputational concerns.” More:
In recent years, many US public companies—particularly in the S&P 500—have linked executive compensation to DEI-related goals, often through short-term incentive plans tied to workforce representation, pay equity, and related priorities. While these metrics were typically qualitative or lightly weighted, they signaled board-level commitment and strategic alignment.
In 2025, however, public disclosure of DEI-linked pay incentives has declined sharply, especially among large-cap companies. This reflects growing legal and reputational concerns, as some critics—including shareholders and political activists—argue that tying compensation to demographic outcomes could raise fiduciary or employment law challenges by incentivizing race- or gender-based employment decisions. In response, many boards have reassessed the defensibility and strategic relevance of these metrics.
Several NLPC shareholder proposals at various companies called for the elimination of DEI incentives from executive compensation, with Pepsi and Mastercard taking those steps specifically as a result of our initiatives at those companies.
But as NLPC has highlighted all this year, companies aren’t totally eliminating DEI — mostly they are just hiding it better by calling it something else. More from today’s Conference Board report:
While DEI-specific incentives have receded, this may represent a shift in framing rather than a wholesale retreat. Notably, more companies in 2025 are linking compensation to broader human capital goals, such as talent development and employee engagement.
Beyond the executive pay component, the report further confirms that companies are hiding their DEI more by not reporting their tracking publicly:
- Corporate public DEI messaging and communications are undergoing a legal- and risk-driven reframing in 2025, with companies reducing the visibility of DEI language while selectively preserving or embedding related goals in ways that are more cautious, controlled, and defensible.
- Companies are taking a more cautious approach to workforce demographic disclosures, with a significant proportion narrowing their reporting on women in management and overall workforce diversity while maintaining internal tracking and data collection.
- So far in 2025, board demographic diversity disclosures have plummeted—particularly on gender and race—driven by legal rulings, softened investor expectations, and rising litigation risk; by contrast, more companies are disclosing formal board committee oversight of DEI, reflecting a shift toward embedding DEI into internal governance to manage risk and enhance legal defensibility.
With far too many executive suites and management offices populated with DEI hires from the ranks of progressive public university and Ivy League business schools, with those in their ranks who still love to include their pronouns in their email signatures (we receive them and see them), the eradication of DEI in Corporate America is still a long way away.
