Relative Total Shareholder Rewards programs
are gaining favor in the marketplace.
Communicate company performance using
Radford's Relative TSR tools
Market Research Data on the Design of Relative TSR Performance Award Programs
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Since 2005, Radford has seen an increase in programs using Relative Total Shareholder Return ("Relative TSR") as a performance metric for equity awards, as illustrated in the chart below. In order to provide our clients with accurate market practices data on this topic, Radford maintains a comprehensive database of plans and programs since 2005 involving Relative TSR. Our researchers use multiple sources of information to populate the database including special event filings, proxy statements and annual reports filed with the US Securities and Exchange Commission as well as news stories and press releases. High-level findings from this research are provided complimentary on Radford's Relative TSR website. For more information or to discuss exchange programs in greater detail, please contact us. The market practices outlined here, and their implications for program design, are addressed in our Relative TSR Plan Design Whitepaper.
Contents of Radford Research:
- 1. Important Plan Design Considerations
- 2. Prevalence of Peer Group Types (Custom vs. Index)
- 3. Outperform/Target Payout Bendpoints
- 4. Prevalence of Payout Vehicles
- 5. Treatment upon Termination/Retirement
- 6. Treatment upon Change in Control
- 7. Treatment of Dividend Equivalents
- 8. List of Companies with Programs involving Relative TSR
This information was last updated on July 31, 2010. Note some figures may not sum to 100% due to rounding.
1. Important Plan Design Considerations
General plan design considerations include: (1) Length of Performance Period, (2) Stock Price Averaging Period, (3) Size of Custom Peer Group, (4) Percentile Ranking for Outperform / Threshold, and (5) Outperform / Target Payout Bendpoints.
Back to top2. Prevalence of Peer Group Types (Custom vs. Index)
Radford has seen that the bulk of companies tend to use a custom peer group, but when using an index, the S&P 500 is most popular.
3. Outperform/Target Payout Bendpoints
According to our research, companies using an actual index as a comparator group tend to have higher payout bendpoints than those using custom comparator groups.
4. Prevalence of Payout Vehicles
Radford has seen that the vast majority of companies favor shares as the final payout vehicle.
5. Treatment upon Termination/Retirement
Radford has seen that the majority of companies prefer to payout the awards at a future multiplier, or final measure, for a participant's death, disability, or retirement during the performance period.
6. Treatment upon Change in Control
Radford has also seen that the majority of plans tend to not pro-rate the award with the actual service period when experiencing a change in control.
7. Treatment of Dividend Equivalents
Radford has seen a trend in that most companies prefer to pay dividends based on the final measure.
8. List of Companies with Programs involving Relative TSR
| A. Schulman Inc. | DPL Inc | Orbital Group Ltd |
| Abbott Medical Optics | Dr Pepper Snapple Group, Inc | OshKosh Truck Corp. |
| Accenture PLC | DreamWorks Animation SKG Inc. | Otter Tail Corp |
| Adtran Inc. | Dresser-Rand Group Inc. | Overseas Shipholding group |
| AES Corporation | DTE Energy | Owens Corning |
| Agilent Technologies Inc | Ducommun Inc. | Par Pharmaceutical Companies |
| Agrium Inc. | Duke Energy Corp | Parker Drilling Co |
| Air Transport Services Group, Inc. | Duke Realty | Patriot Coal Corp |
| Airtran Holdings Inc | Dune Energy Inc. | Patterson UTI Energy |
| Ak Steel Holding Corp | Dupont | Peabody Energy Corp |
| Alaska Air Group Inc | Eastman Chemical | Pearson PLC |
| Alcon Inc | Eclipsys | Penn National Gaming Inc |
| Allegheny Energy Inc. | Edison International | People's United Financial, Inc. |
| Allegheny Technologies | El Paso Electric Co | Pep Boys |
| Alliant Energy | Elizabeth Arden Inc | Pepco Holdings Inc |
| Alliant Techsystems Inc | Empire District Electric Co | Pfizer Inc. |
| Alpha Natural Resources, Inc. | Endo Pharmaceuticals | PG&E |
| Altria Group, Inc. | Eni Spa | Piedmont Natural Gas Co Inc |
| AMB Property Corp | Ensco International | Piedmont Office Realty Trust, Inc. |
| Ameren Corporation | Entergy Corp | Pioneer Drilling Co |
| American Airlines | EQT Corp | Pioneer Natural Resources Company |
| American Axle & Manufacturing Holdings Inc | Equity Inns | Polycom Inc |
| American Electric Power Co | Equity One, Inc. | Portfolio Recovery Associates |
| American Express | Exelon Corporation | Potlatch Corporation |
| American Water Works Comp | Exide Technologies | PPG Industries |
| Amerigas Partners LP | Fairpoint Communications | PPL Corp |
| Amerisource Bergen | Federal Realty Investment | Precision Drilling Trust |
| Amgen | Federal Signal Corp | Pride Interational |
| AMR Corporation | Firstenergy Corp | Progress Energy Inc. |
| Anadarko Petroleum Corp | FMC Technologies | Prudential Plc |
| Analogic | Forest Oil Corp. | PSEG Power |
| Anglogold Ashanti Ltd | Frontier Oil Corp | Pulte Homes |
| Anheuser-Busch Inc. | General Electric | Quanex Building Products Corp. |
| Ansys Inc | General Motors Corp | Questar Corp |
| Apache Corp | Genzyme Corp | Qwest Communications |
| Applebees | Gibraltar Industries | Rackspace Hosting, Inc. |
| Applied Materials | Gilead Sciences | Radian Group Inc |
| Archer Daniels Midland | GlaxoSmithKline Plc. | Rayonier Inc. |
| Arris Group Inc | Glimcher Realty Trust | Raytheon |
| Arvinmeritor | Global Crossing | Red Hat Inc |
| Ashland Inc. | Global Industries LTD | Red Robin |
| Associated Banc-Corp | Global Payments Inc. | Regency Centers Corp |
| Associated Estates Realty Corp. | Goodrich | Renaissancere Holdings |
| Assurant Inc | Great Plains Energy | Rentech Inc. Co. |
| ASTRAZENECA PLC | H J Heinz | Rio Tinto |
| AT&T, Inc. | H&R Block, Inc. | Robbins & Myers |
| Avaya Incorporated | Harleysville Group Inc | Rockwell Automation |
| Avery Dennison Corporation | Harman International Industries Inc. | Rockwell Collins |
| Avista Corp | Hawaiian Electric Industries | Rowan Companies |
| Ball Corp | Healthsouth Corp | Royal Bank of Canada |
| Banco Bilbao Vizcaya Argentaria | Heidrick & Struggles International Inc | Royal Bank of Scotland |
| Banco Santander | Hersha Hospitality Trust | RRI Energy Inc |
| Bank of Montreal | Hershey Foods | RTI International Metals |
| Bank of Nova Scotia | Hewlett Packard Company | Ryder System Inc |
| Bank of NY Mellon | Home Depot | Saia, Inc. |
| Barclays PLC | Honeywell International Inc | Santander Bancorp |
| Barrick Gold Corp | Hormel Foods Corp | Sara Lee Corp |
| Basic Energy Services, Inc. | Hospira Inc | Scana Corp |
| Baxter International | Host Hotels & Resorts | Schering Plough Corp |
| BearingPoint | HSBC Holdings PLC | Schnitzer Steel |
| Bemis Co Inc. | Hubbell Corporation | Selective Insurance Group Inc |
| Best Buy | Husky Energy Inc. | Sempra Energy |
| Bill Barrett Corp | Idacorp Inc | Service Corporation International |
| Biovail Corp International | Independent Bank Corp | Silicon Valley Bank |
| Black Box Corp | ING Groep NV | Simon Property Group Inc |
| Black Hills Corp | Inmarsat | Sims Metal Management Limited |
| BMC Software | Innospec Inc. | Solutia Inc. |
| Bob Evans Farms | Insmed Inc | South Jersey Industries Inc |
| Borgwarner Inc | Intel Corp | Southern Company |
| Boston Scientific | International Flavors & Fragrances | Spartech Corp. |
| Brandywine Realty Trust | International Paper Company | Spectra Energy Corp |
| Brinker Interantional Inc | Intuit Inc | SPX Corp. |
| Bristow Group Inc | IPC Holdings | St Joe Co |
| British Sky Broadcasting | ITC Holdings Corp | St Mary Land & Explorploration Co |
| Brown Forman Corp | ITT Technologies | Stage Stores Inc |
| BT Group PLC | Jabil Circuit | Stanley Black & Decker, Inc. |
| Buckeye Technologies | JamesHardie Industries | Steelcase Inc. |
| Cabot Oil | John Bean Technologies Corporation | Sterlite Industries India |
| Cadbury Schweppes | Johnson & Johnson | Stoneridge Inc |
| Cal Dive International | Jones Apparel Group Inc | Strategic Hotels & Resort |
| Calgon Carbon Corporation | KB Home | Sun Life Financial |
| Cameco Corp | KBR, Inc. | Suncor Energy Inc. |
| Campbell Soup Co. | Keithley Instruments | Sunoco |
| Canadian Pacific Railway Co | Key Energy Services Inc | Suntrust Banks |
| Capital One Financial Corporation | Kimco Realty Corp | Superior Energy Services Inc |
| Care Investment Trust | King Pharmaceuticals | SuperMedia |
| Carlisle Companies Inc | Korn Ferry International | Sybase Incorporated |
| Carolina Power & Light Co | Kraft Foods | Tanger Factory Outlet Centers Inc |
| Carpenter Technology | KT Corporation | Taubman Centers Inc. |
| Carriage Services | Kulicke & Soffa | Teco Energy |
| Castle A M & Co | Laclede Group Inc | Teekay Corp |
| CBS Corporation | Leggett & Platt Inc. | Terex |
| Celanese Corp. | Lexington Realty Trust | Terreno Realty Corp |
| Central Vermont Public Service Corp | Liberty Property Trust | Textron |
| Centurytel Inc | Lihir Gold Ltd | Thermo Fisher |
| Charlotte Russe | Lockheed Martin | Thomas & Betts Corp |
| Charming Shoppes | Logitech International SA | Time Warner |
| Chart Technologies | Macerich Co | Tomkins plc |
| Chartered Semiconductor Manufacturing Ltd. | Macy's Inc. | Total System Services, Inc. |
| Chesapeake Corporation | Maine and Maritimes Corp | Transalta Corp |
| Chesapeake Utilities | Manitowoc Co. Inc. | Transcanada Corp |
| Chevron Corporation | Marathon Oil Corp | Transglobe Energy Corp |
| Chubb Corporation | Mattel, Inc. | Treehouse Foods |
| Ciena Corp | Mcdermott International Inc | Trustmark Corp |
| Cigna Corp | MDU Resources | Ttm Technologies Inc |
| Cimnet Incorporated | Mead Johnson Nutrition | Tyco International |
| Cincinnati Financial Corp. | Mentor Corp. | UGI Corp |
| Citigroup Inc. | Methanex Corp | Uil Holdings Corp |
| Citrix Systems, Inc | Metlife | Unilever N V |
| City National Corp | Millicom International Cellular | Union First Market Bankshares Corp |
| Clearwater Paper Corportation | Minerals Technologies Inc. | UniSource Energy |
| Cliffs Natural Resources | Modine Manufacturing | United States Steel Corp |
| CMS Energy Corp | Morgan Stanley | United Technologies Corp |
| CNX Gas Corporation | Motorola Inc | Unitrin Inc. |
| Coeur d'Alene Mines Corp | Murphy Oil Corporation | Universal American Corp |
| Coldwater Creek Inc. | National City Bank | Universal Technical Institute |
| Collective Brands, Inc. | National Grid PLC | US Airways Group, Incorporated |
| Columbus McKninon Corp | Nationwide Health Properties | US Bancorp |
| Compass Minerals International Inc | Navarre Corp | USG Corp |
| Comverge | Navistar International Corp | Validus Holdings Ltd |
| ConocoPhillips | Neenah Paper Inc. | Vectren Corporation |
| Conseco | New Jersey Resources Corporation | Verigy |
| Constellation Energy Group Inc | Newalliance Bancshares | Verizon Communications |
| Convergys Corp | Newell Rubermaid | Viacom Incorporated |
| Cooper Industries Plc | NewField Exploration | Virginia Electric & Power Co |
| Corn Products International | Newmont Mining | Visa Inc |
| Corporate Office Properties Trust | News Corp | Vodafone Group |
| Corus Entertainment | Nicor Incorporated | Vulcan Materials |
| Cousins Properties Inc | Noble Corporation | Walt Disney Company |
| Covidien | Nordstrom | Warnaco Group Inc |
| Crown Holdings Inc. | Norfolk Southern Corp | Washington Real Estate |
| CTS Corporation | Northeast Utilities | Weatherford International Ltd |
| DCT Industrial Trust Inc. | Northrop Grumman Corp | Webster Financial Corporation |
| Dean Foods | Northwest Natural Gas | Westlake Chemical |
| Del Monte Foods | Novagold Resources Inc | Westpac Banking Corp |
| Dell Inc | NPS Pharmaceuticals | WGL Holdings |
| Denny's Corp | Nstar | Whitney Holding Corp |
| Developers Diversified Realty Corp | NV Energy | Williams Companies |
| Diebold Inc. | Occidental Petroleum Corporation | Wind River Systems |
| Diodes Inc. | OceanFirst Financial | Wisconsin Energy Corp |
| Dollar Thrifty Automotive | Oge Energy Corp. | WPP Group PLC |
| Dominion Resources | Old National Bancorp | Xcel Energy Inc |
| Dover Corp | Oneok Inc | Xenoport Inc |
| Dow Jones | Open Text Corp | Yahoo! Inc |
For further information on plan design considerations, please consult our Relative TSR Plan Design Whitepaper. To learn more about how Radford can assist in the design of your equity incentive program, contact one of your Radford consultants.
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Jon Burg |
Terry Adamson |
