GRG Remuneration Insight 77

by Denis Godfrey & James Bourchier

Total Shareholder Return (TSR) has become an essential vesting condition for long term incentive (LTI) grants of equity units because it effectively aligns the interests of both management and shareholders. Here we discuss three ways in which TSR may be used as a vesting condition: absolute TSR, relative TSR using a comparator group of companies, and relative TSR using an accumulation index as a benchmark (not ranked).