Tag Archives: long term incentives

S&P 500 CEO Compensation Increase Trends

CEO pay continues to be a widely debated topic in the media, in the boardroom, and among investors and proxy advisors. As the U.S. was in the heart of the 2008-2009 financial crisis, CEO total direct compensation (TDC; base salary + actual bonus paid + value of long-term incentives [LTI]) dropped for 2 consecutive years. Continue reading

Long-Term Pay-For-Performance Alignment: A 10-Year Review of CEO PSU Plan Payout Histories

With the introduction of say-on-pay (SOP) in 2011 and the increased clout of proxy advisory firms on executive compensation program designs, the performance share unit (PSU) has become a common feature of executive long-term incentive (LTI) programs among U.S. public companies. Continue reading

Considering Performance Stock Options

The rise in both the prevalence and prominence of long-term performance plans has been one of the most significant trends in executive compensation over the past 15 years. At the time of the dot-com market collapse (March 2000 to October 2002) and the demise of several prominent U.S. companies (e.g., the Enron scandal revealed in October 2001), long-term performance plans were only used by a relatively small portion of large U.S. public companies. Continue reading

Effectively Administering Your Relative TSR Program – Learning and Best Practices

Relative TSR is a performance metric most often used in LTI performance plans. Its use as a metric has nearly doubled over the past 5 years and is now used by approximately 50% of companies spanning all sizes and industries. While the appeal of this metric for shareholders and directors alike is its alignment with shareholder value creation and the absence of having to establish long-term performance goals, there are other nuances and considerations that can make the administration of these plans much more complex than other types of arrangements. Continue reading

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