The Debate on Performance Shares - Who Has It Right?

Written by

Ani Huang
President and CEO
Center on Executive Compensation
&
Dr. Charles G. Tharp
Senior Advisor, Research and Practice
Center on Executive Compensation

After a decade of complete primacy, performance-based share units (PSUs) are undergoing a moment of intense scrutiny. Investors like CII and Norges Bank are questioning whether:
• PSUs should be the prevailing form of long-term incentives for CEOs, and
• whether they are in fact tied to better performance In response to investor input, proxy advisors like ISS and Glass Lewis are softening their requirements around performance-based equity. It can be tough to sort through all the differing perspectives. Here is a resource we hope will help clarify how the varying findings compare to each other, which questions are being asked (and answered) and key considerations for you in your work with the Compensation Committee.