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 January 30, 2012. 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. | Ducommun Inc. | Parker Drilling Co |
| Abbott Medical Optics | Duke Energy Corp | Patriot Coal Corp |
| Accenture PLC | Duke Realty | Patterson UTI Energy |
| ACI Worldwide | Dun & Bradstreet Corp | Peabody Energy Corp |
| Acxiom Corp. | Dupont | Pearson PLC |
| Adtran Inc. | Dynamex Inc | Penn National Gaming Inc |
| AES Corporation | Eastman Chemical | Pennsylvania Real Estate Investment Trust |
| Agilent Technologies Inc | Eclipsys | People's United Financial, Inc. |
| Agrium Inc. | Edison International | Pep Boys |
| AIMCO | El Paso Electric Co | Pepco Holdings Inc |
| Air Transport Services Group, Inc. | Electronic Arts Inc. | PETROLEUM DEVELOPMENT CORP |
| Airtran Holdings Inc | Elizabeth Arden Inc. | Pfizer Inc. |
| Ak Steel Holding Corp | Empire District Electric Co | PG&E |
| Alaska Air Group Inc | Endo Pharmaceuticals | Philip Morris International, Inc. |
| Alcatel-Lucent | Eni Spa | Piedmont Natural Gas Co Inc |
| Alcon Inc | Ensco International | Piedmont Office Realty Trust, Inc. |
| Allegheny Energy Inc. | Entergy Corp | Pinnacle West Capital Corp |
| Allegheny Technologies | EQT Corp | Pioneer Drilling Co |
| Alliant Energy | Equity Inns | Pioneer Natural Resources Company |
| Alliant Techsystems Inc | Equity One, Inc. | Plum Creek Timber Co. Inc. |
| Allscripts Healthcare Solutions | Exelon Corporation | PNM Resources, Inc. |
| Alpha Natural Resources, Inc. | Exide Technologies | Polycom Inc |
| Altria Group, Inc. | Express Scripts Inc. | POPE RESOURCES LTD PARTNERSHIP |
| AMB Property Corp | Fairpoint Communications | Portfolio Recovery Associates |
| Ameren Corporation | Federal Realty Investment | Potlatch Corporation |
| American Assets Trust, Inc. | Federal Signal Corp | PPG Industries |
| American Axle & Manufacturing Holdings Inc | FirstEnergy Corp | PPL Corp |
| American Electric Power Co | Flextronics International Ltd. | Precision Drilling Trust |
| American Express | Flowserve Corp | Pride Interational |
| American Water Works Comp | Fluor Corp | Pro-Dex Inc. |
| Amerigas Partners LP | FMC Technologies | Progress Energy Inc. |
| Ameriprise Financial | Forest Oil Corp. | Prologis, Inc/Prologis, LP |
| Amerisource Bergen | Foster Wheeler AG | Prudential Plc |
| Amgen | Frontier Oil Corp | PSEG Power |
| AMN Healthcare | FTI Consulting, Inc. | PulteGroup Inc. |
| AMR Corporation (American Airlines) | Fuel-Tech Inc. | Quaker Chemical Corporation |
| Anadarko Petroleum Corp | General Electric | Qualcomm |
| Analogic | General Motors Corp | Quanex Building Products Corp. |
| Anglogold Ashanti Ltd | Gen-Probe | Questar Corp |
| Anheuser-Busch Inc. | Genzyme Corp | Qwest Communications |
| Ansys Inc | Gibraltar Industries | Rackspace Hosting, Inc. |
| Apache Corp | Gilead Sciences | Radian Group Inc |
| Applebees | GlaxoSmithKline Plc. | Ramco-Gershenson Properties Trust |
| Applied Materials | Glimcher Realty Trust | Rayonier Inc. |
| Aqua America Inc. | Global Crossing | Raytheon |
| Arc Resources Ltd. | Global Industries LTD | Reald Inc |
| Archer Daniels Midland | Global Payments Inc. | Red Hat Inc |
| Arris Group Inc | Goodrich | Red Robin |
| Arvinmeritor | Granite Construction Inc. | Regency Centers Corp |
| Ashland Inc. | Great Plains Energy | RenaissanceRe Holdings Ltd. |
| Associated Banc-Corp | GREATBATCH, INC. | Rentech Inc. Co. |
| Associated Estates Realty Corp. | H J Heinz | Retail Opportunity Investment Corp |
| Assurant Inc | H&R Block, Inc. | Rio Tinto |
| ASTRAZENECA PLC | Hanover Insurance Group, Inc | Robbins & Myers |
| AT&T, Inc. | Harleysville Group Inc | Rockwell Automation |
| Atlantic Power Corp | Harman International Industries Inc. | Rockwell Collins |
| ATMI, Inc. | Hawaiian Electric Industries | Rockwood Holdings |
| Avaya Incorporated | Healthsouth Corp | Rowan Companies |
| Avery Dennison Corporation | Heidrick & Struggles International Inc | Royal Bank of Canada |
| Avista Corp | Hersha Hospitality Trust | Royal Bank of Scotland |
| Ball Corp | Hershey Foods | RRI Energy Inc |
| Banco Bilbao Vizcaya Argentaria | Hewlett Packard Company | RTI International Metals |
| Banco Santander | Hill-Rom Holdings, Inc. | Ryder System Inc |
| Bank of Montreal | HJ Heinz Co. | Sabra Healthcare |
| Bank of Nova Scotia | Home Depot | Saia, Inc. |
| Bank of NY Mellon | Honeywell International Inc | San Diego Gas & Electric Co |
| Barclays PLC | Hormel Foods Corp | Santander Bancorp |
| Barrick Gold Corp | Hospira Inc | Sara Lee Corp |
| Basic Energy Services, Inc. | Host Hotels & Resorts | Scana Corp |
| Baxter International | HSBC Holdings PLC | Schering Plough Corp |
| BearingPoint | Hubbell Corporation | Schnitzer Steel |
| Bemis Co Inc. | Husky Energy Inc. | Scripps Networks Interactive, Inc. |
| Best Buy | Iamgold | Seagate Technology |
| Bill Barrett Corp | IDACORP Inc | Selective Insurance Group Inc |
| BioMarin Pharmaceutical Inc. | Independent Bank Corp | SemGroup Corporation |
| Biovail Corp International | Infinera Corp | Sempra Energy |
| Black Box Corp | ING Groep NV | Service Corporation International |
| Black Hills Corp | Inmarsat | Shaw Group Inc |
| BMC Software | Innospec Inc. | Silicon Laboratories, Inc |
| Bob Evans Farms | Insmed Inc | Silicon Valley Bank |
| Borgwarner Inc | Integrys Energy Group | Silver Standard Resources |
| Boston Properties | Intel Corp | Silver Wheaton Corp. |
| Boston Scientific | International Flavors & Fragrances | Simon Property Group Inc |
| Brandywine Realty Trust | International Paper Company | Sims Metal Management Limited |
| Bre Properties | Intersil Corporation | SM Energy Co |
| Briggs & Stratton | Intuit Inc | Snyder's-Lance, Inc. |
| Brinker Interantional Inc | IPC Holdings | Solera Holdings Inc. |
| Bristow Group Inc | ITC Holdings Corp | Solutia Inc. |
| British Sky Broadcasting | ITT Technologies | South Jersey Industries Inc |
| Brown Forman Corp | Jabil Circuit | Southern Company |
| Bryn Mawr Bank | Jack Henry & Associates | Spartech Corp. |
| BT Group PLC | JamesHardie Industries | Spectra Energy Corp |
| Buckeye Technologies | John Bean Technologies Corporation | SPX Corp. |
| Cabot Oil | Johnson & Johnson | St Joe Co |
| Cadbury Schweppes | Jones Apparel Group Inc | St Mary Land & Explorploration Co |
| CAE Inc. | KB Home | Stage Stores Inc |
| Cal Dive International | KBR, Inc. | Stanley Black & Decker, Inc. |
| Calgon Carbon Corporation | Keithley Instruments | Steelcase Inc. |
| Cameco Corp | Key Energy Services Inc | Stein Mart Inc |
| Campbell Soup Co. | Kimco Realty Corp | Sterlite Industries India |
| Canadian Pacific Railway Co | King Pharmaceuticals | Stoneridge Inc |
| Capital One Financial Corporation | Koninklijke Philips Electronics NV | Strategic Hotels & Resort |
| Care Investment Trust | Korn Ferry International | Sun Life Financial |
| Carlisle Companies Inc | Kraft Foods | Suncor Energy Inc. |
| Carolina Power & Light Co | KT Corporation | Sunoco |
| Carpenter Technology | Kulicke & Soffa | Suntrust Banks |
| Carriage Services | L-3 Communications Holdings Inc | Superior Energy Services Inc |
| Castle A M & Co | Laclede Group Inc | SuperMedia |
| CBS Corporation | Legg Mason Inc. | Sybase Incorporated |
| Cedar Shopping Centers | Leggett & Platt Inc. | Symantec Corporation |
| Celanese Corp. | Lexington Realty Trust | Take-Two Interactive Software Inc. |
| Celestica Inc. | Liberty Property Trust | Tampa Electric CO |
| Central Vermont Public Service Corp | Lihir Gold Ltd | Tanger Factory Outlet Centers Inc |
| CenturyLink Inc | Lincoln National | Taubman Centers Inc. |
| Charlotte Russe | Lockheed Martin | Teco Energy |
| Charming Shoppes | Logitech International SA | Teekay Corp |
| Chart Technologies | Macerich Co | Telefonica, S.A. |
| Chartered Semiconductor Manufacturing Ltd. | Macy's Inc. | Tenneco Inc. |
| Chesapeake Corporation | Maidenform Brands | Terex |
| Chesapeake Lodging Trust | Maine and Maritimes Corp | Terreno Realty Corp |
| Chesapeake Utilities | Manitowoc Co. Inc. | Tesoro |
| Chevron Corporation | Marathon Oil Corp | Textron |
| Chubb Corporation | MarineMax, Inc. | Thermo Fisher |
| Ciena Corp | MarkWest Energy Partners | Thomas & Betts Corp |
| Cigna Corp | Martin Marietta Materials Inc. | Time Warner |
| Cimnet Incorporated | Matrix Service CO | Tomkins plc |
| Cincinnati Financial Corp. | Mattel, Inc. | Total System Services, Inc. |
| Citigroup Inc. | Mcdermott International Inc | Transalta Corp |
| Citrix Systems, Inc | MDU Resources | Transcanada Corp |
| City National Corp | Mead Johnson Nutrition | Transglobe Energy Corp |
| Clearwater Paper Corportation | Mentor Corp. | Treehouse Foods |
| Cleco Corp | Merck & Co. Inc. | Trident Microsystems Inc. |
| Cliffs Natural Resources | Methanex Corp | Trustmark Corp |
| Cloud Peak Energy | Metlife Inc. | Ttm Technologies Inc |
| CME Group Inc. | Mid-America Apartment Communities, Inc | Tyco International |
| CMS Energy Corp | Millicom International Cellular | UGI Corp |
| CNX Gas Corporation | Mine Safety Appliances Co | Uil Holdings Corp |
| Coeur d'Alene Mines Corp | Minerals Technologies Inc. | Unilever N V |
| Coherent Inc. | Modine Manufacturing | Union First Market Bankshares Corp |
| Coldwater Creek Inc. | Mohawk | UniSource Energy |
| Collective Brands, Inc. | Morgan Stanley | United States Steel Corp |
| Columbus McKinnon Corp | Motorola Inc | United Technologies Corp |
| Commercial Metals | Motorola Solutions | Unitrin Inc. |
| Compass Minerals International Inc | MPG Office Trust, Inc. | Universal American Corp |
| Comverge | Multi-Fineline Electronix Inc. | Universal Technical Institute |
| ConocoPhillips | Murphy Oil Corporation | US Airways Group, Incorporated |
| Conseco | National City Bank | US Bancorp |
| Consol Energy Inc. | National Grid PLC | USEC Inc. |
| Consolidated Edison Inc | National Retail Properties | USG Corp |
| Consolidated Tomoka Land Co | Nationwide Health Properties | Validus Holdings Ltd |
| Constellation Energy Group Inc | Navarre Corp | Vectren Corporation |
| Convergys Corp | Navistar International Corp | Venoco, Inc. |
| Cooper Industries Plc | Neenah Paper Inc. | Verigy |
| Corn Products International | New Jersey Resources Corporation | Verizon Communications |
| Corporate Office Properties Trust | Newalliance Bancshares | Viacom Incorporated |
| Corus Entertainment | Newell Rubermaid | Virginia Electric & Power Co |
| Cousins Properties Inc | NewField Exploration | ViroPharma Inc. |
| Covidien | Newmont Mining | Visa Inc |
| Crane Co. | News Corp | Vodafone Group |
| Crown Holdings Inc. | Nicor Incorporated | Vulcan Materials |
| CTS Corporation | Noble Corporation | Walt Disney Company |
| DCT Industrial Trust Inc. | Nordstrom | Warnaco Group Inc |
| DealerTrack Holdings Inc | Norfolk Southern Corp | Washington Gas Light Company |
| Dean Foods | Northeast Utilities | Washington Real Estate |
| Deere & Co. | Northrop Grumman Corp | Watson Pharmaceuticals |
| Del Monte Foods | Northwest Natural Gas | Weatherford International Ltd |
| Dell Inc | Novagold Resources Inc | Webster Financial Corporation |
| Denbury Resources, Inc | NPS Pharmaceuticals | Wendy's/Arby's Group, INC |
| Denny's Corp | Nstar | Westar Energy Inc |
| Developers Diversified Realty Corp | NV Energy | Western Refining Inc |
| Diebold Inc. | Occidental Petroleum Corporation | Westlake Chemical |
| Dime Community Bancshares | OceanFirst Financial | Westpac Banking Corp |
| DineEquity, Inc. | Oge Energy Corp. | Weyerhaeuser Co. |
| Diodes Inc. | Oilsands Quest, Inc. | WGL Holdings |
| Dollar Thrifty Automotive | Old National Bancorp | Whitney Holding Corp |
| Dominion Resources | Olin Corp | Willbros Group Inc. |
| Dover Corp | Omega Healthcare Investors | Williams Companies |
| Dow Chemical | Omnicell | Wind River Systems |
| Dow Jones | Oneok Inc | Wisconsin Energy Corp |
| DPL Inc | Open Text Corp | Wolverine World Wide |
| DR Horton Inc | Orbital Group Ltd | WPP Group PLC |
| Dr Pepper Snapple Group, Inc | OshKosh Truck Corp. | Xcel Energy Inc |
| DreamWorks Animation SKG Inc. | Otter Tail Corp | Xenoport Inc |
| Dress Barn Inc | Overseas Shipholding group | Yahoo! Inc |
| Dresser-Rand Group Inc. | Owens Corning | |
| DTE Energy | Par Pharmaceutical Companies |
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.
North America - West |
North America - East |
EMEA |
|---|---|---|
|
Jon Burg, Vice President |
Terry Adamson, Senior Vice President |
Robert Miller, Regional Head EMEA |
