A better way to design performance shares

A better way to design performance shares

A major change in U.S. executive pay over the past 20 years has been the replacement of stock options with performance shares A 2023 study found that 87% of S&P 500 companies use performance shares (vs only 18% using stock options). 72% of performance share companies used stock price or TSR as their vesting measure, and 70% of those companies used relative TSR as their vesting measure.[1] The goal of performance shares is to avoid paying manager…