Here are Updates on Alcon's (ALC) Compensation and Sustainability Matters

Sustainable Growth Advisers (SGA), an investment management company, released its fourth-quarter investor letter for its “Emerging Markets Growth Strategy.” A copy of the letter can be downloaded here. The fourth quarter of 2025 marked strong divergence from the market. Market leadership by AI beneficiaries and revival of cyclical sectors dominated the market, while quality growth strategies faced challenges. In Q4 2025, the portfolio returned 0.8% (Gross) and 0.6% (Net) compared to the MSCI EM Net TR Index return of 4.7% and the MSCI EM Growth Net TR Index return of 3.3%. In 2025, the portfolio delivered strong returns of 23.8% (Gross) and 22.8% (Net) but lagged the 33.6% and 34.3% returns for the indexes, respectively. The portfolio projects 13% revenue growth and 16% earnings growth annually for the next three years. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, SGA Emerging Markets Growth Strategy highlighted stocks like Alcon Inc. (NYSE:ALC). Alcon Inc. (NYSE:ALC) is a Swiss-based healthcare and medical technology company focused on eye care products.  The one-month return of Alcon Inc. (NYSE:ALC) was 0.25%, and its shares lost 12.05% of their value over the last 52 weeks. On February 13, 2026, Alcon Inc. (NYSE:ALC) stock closed at $79.20 per share, with a market capitalization of $39.052 billion.

SGA Emerging Markets Growth Strategy stated the following regarding Alcon Inc. (NYSE:ALC) in its fourth quarter 2025 investor letter:

"Alcon Inc. (NYSE:ALC): In December we met with several members of the leadership team at Alcon regarding two main ESG matters: compensation and sustainability.

On compensation, we raised the issue regarding Alcon’s 2025 performance and asked to see the impact to the 2025 short term incentive awards. We again asked for the incorporation of TSR and a metric for measuring M&A effectiveness. We believe these will improve the understanding of company performance, rather than relying on revenue and EPS growth without accounting for M&A. Management responded that they expected shareholders will be pleased to see that there will be an impact to short-term incentives on recent performance and are also considering ROIC measures.

Alcon also explained the difficulties of being a Swiss domiciled company with operations in US. They would like to incorporate more US peers into their compensation benchmarks but are regulated by Swiss rules, so Alcon already has a peer set of European and US peers for benchmarking. Alcon notes that its executives are significantly underpaid versus Bausch or Cooper, despite being a much bigger company executives sit around the 35th percentile for remuneration. They will be seeking some adjustments through the next annual general meeting; however, management acknowledged that timing is not great given their underperformance in 2025.

On sustainability metrics, we were pleased to hear that Alcon now offers increased disclosure of its Scope 3 emissions as well as carbon offsets. This is a topic we discussed with them numerous times and we are happy to see the increased level of transparency."

Alcon Inc. (NYSE:ALC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 41 hedge fund portfolios held Alcon Inc. (NYSE:ALC) at the end of the third quarter, up from 34 in the previous quarter. While we acknowledge the potential of Alcon Inc. (NYSE:ALC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Alcon Inc. (NYSE:ALC) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.