Relative Total Shareholder Return Programs

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Unexpected Expense

Is Your Stock-Based Compensation Program about to Cause a Second Wave of Expense? The first quarter of 2020 was one of the worst quarters for the stock market since the Great Recession, with the S&P...
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The New AS 1210: Using the Work of a Specialist

The valuation and accounting for employee equity under ASC 718 can be quite material and has ramifications throughout your corporate financials. Some of the exhibits that will be affected are the income statement, the disclosures...
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TSR Calculation: Accumulated Dividends

Infinite Equity laid out the preferred method for calculating Total Shareholder Return (TSR) here. However, the calculation of TSR ultimately must follow the definition outlined in the legal grant agreement. Some companies do not assume...
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The “Stub Period” Challenge

Relative Total Shareholder Return (RTSR) awards are the most prevalent type of performance awards in the global marketplace.  The  accounting fair value under ASC Topic 718 for RTSR awards is estimated using Monte Carlo simulation...
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Relative TSR Plan Design Checklist

Performance shares earned contingent on a performance metric of Relative Total Shareholder Return (RTSR) is the most prevalent metric seen globally. However, the design of a RTSR plan can be quite challenging if not done appropriately. The...
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Don’t Let International Peers be Foreign to You

Performance shares earned based on Relative Total Shareholder Return (RTSR) are the most prevalent form of performance equity in the global marketplace. Selecting appropriate peer companies has always been a critical aspect of RTSR plan...
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Alternative Types of RTSR Plans

Once a company decides that it is going to grant performance shares contingent on Relative Total Shareholder Return ("RTSR"), one of the initial plan design considerations is the “classification” of RTSR plan you are considering,...
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Outperform Slopes in a Relative TSR Plan

Performance shares earned contingent on a performance metric of Relative Total Shareholder Return (“RTSR”) is the most prevalent globally as seen in the marketplace.  There are several forms in which a Relative TSR plan can...
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TSR Calculation – Best Practice

Section 1 - TSR Calculation Considerations [latexpage]One of the benefits of using Relative Total Shareholder Return ("RTSR") as a performance metric is the transparency of the calculation. It is based on empirical stock price data...
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What Is Monte Carlo Simulation?

Performance Share plans that are contingent on Relative Total Shareholder Return (“RTSR”) continue to gain in prevalence. However, the accounting rules under ASC 718 create financial reporting needs on the date of grant, as it...