The use of performance-based equity in a CEO compensation packages has gained popularity over the last five years, as shareholders are increasingly demanding that companies provide compensation that attempts to link pay and performance, says Equilar, an executive compensation data firm. A study of S&P 1500 companies by Equilar revealed that shareholders no longer feel time-based restricted stock, including stock options, are sufficient to tie pay to performance.
“An executive must be able to execute against specific metrics and goals and successfully implement corporate strategies in order to receive a predetermined level of stock,” said the report.
