July 13, 2015 Executive Compensation Executive & Director Pay Design Articles

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Executive & Director Pay Design

Checklist for Total Shareholder Return Incentive Plans

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.

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

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.

View the full article as it was originally published.

Mark Emanuel

This article was originally published in Workspan.

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