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Long-term or Mid-term Incentives: Avoiding Award Design Homogenization

Date: September 10, 2015
Time: 10:00 am PT / 1:00 pm ET

Shareholders and institutional advisors are demanding that companies link pay with performance, which has led to a surge in performance-based awards and a move away from stock options. But current flavors of performance plans often are limited to three-year performance periods, suggesting they might be more aptly labeled mid-term incentives than long-term incentives.

Business strategies take years to set in motion. For a standard three-year performance period, the payout outcome can depend more on the timing of the performance start and end dates than actual strategy execution. This begs the question: are executives really rewarded for long-term shareholder value creation, or for short-term volatility?

In this webinar, we will share empirical research on how actual payouts for S&P 500 companies would have differed had the performance period been expanded to five years. While standard three-year performance plans will always continue to have merit, we’ll explore practical design alternatives that can enhance the long-term incentive focus of the overall incentive program.


Dan Marcec
Director of Content

Eric Hosken
Partner, Compensation Advisory Partners
Compensation Advisory Partners LLC (CAP)

Takis Makridis
President and CEO
Equity Methods, LLC