Tag: relative total shareholder return

Do performance metrics based on rTSR transform an equity award into a lottery ticket?

According to a  2017 report from Equilar, an executive compensation data firm, “relative total shareholder return” continues to be the most common performance measure used in long-term incentive plans for CEOs among S&P 500 companies. (See this PubCo post.)  But this article in CFO.com contends that, with a metric of rTSR, the “pay for performance linkage” is “weak”; rather than rewarding long-term performance, use of rTSR is tantamount to giving “management a lottery ticket.”