TSR Performance Tracking: Managing the Peer List

Relative total shareholder return (rTSR) awards have become widespread and increasingly elaborate. This has created major challenges for compensation, HR, finance, and accounting professionals as they strive to accurately track and communicate the performance of their companies’ awards. Unclear or untimely communication on rTSR award status can create confusion for plan participants and upsetting surprises for the compensation committee. Similarly, the complexity of post-grant performance tracking of rTSR awards spells risk for the accounting and finance team in calculating share counts for EPS under ASC 260.

Updated for 2019, this issue brief will help you understand the complicating factors in post-grant TSR performance tracking, primarily with changes to peer lists over time. The issues covered in this brief are important to executive compensation, HR, accounting/finance, and plan participants.