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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.

Panelists:

Dan Marcec
Director of Content
Equilar

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

Takis Makridis
President and CEO
Equity Methods, LLC