Executive Long-Term Incentive Plans 2020

Executive Long-Term Incentive Plans, an Equilar publication, examines trends in incentive plan design at Equilar 500 companies over the last five fiscal years. The report analyzes performance metrics and periods associated with long-term awards granted to NEOs, particularly CEOs and CFOs. E*TRADE Corporate Services provided independent commentary on the structure of incentive plan design, particularly in light of the current environment.

About the Report

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Key Findings

• In 2019, relative total shareholder return (TSR) was once again the most prevalent CEO LTIP performance metric at Equilar 500 companies.
• The percentage of companies that used a three-year performance period in their NEO LTIPs rose by 16.8% since 2015.
• While relative TSR is by far the most prevalent metric, operating profit was the most likely to stand alone as 100% of the metric weighting. TSR most commonly made up 50% of an award’s weighting.
• The most prevalent threshold, associated with 22 metrics, required NEOs to reach between 91% and 99% of their performance target.