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Checklist for Total Shareholder Return Incentive Plans

Checklist for Total Shareholder Return Incentive PlansZoom inDownload PDF

Does your company’s total shareholder return align with its business goals?

Today, one of the most significant debates in executive compensation circles centers on the merits of relative total shareholder return (TSR) as an incentive plan metric. On one side, proxy advisers and governance groups have championed relative TSR as a metric that — in theory — ensures executives are only rewarded when shareholders experience above-market returns. On the other side, a host of critics (including directors, executives and consultants alike) notes a number of challenges that — in practice — make relative TSR a difficult metric to use.

Download the full report, “Checklist for Incentive Plans Total Shareholder Return,” by Mark Emanuel, for a list of common critiques of relative TSR plans.

This article originally appeared in the July 2015 issue of Workspan