This 46th annual FW Cook Top 250 Report details the long-term incentive practices and trends of the 250 largest companies in the Standard & Poor’s (“S&P”) 500. Notable trends and key findings from this year’s study include the following:
Companies continue to employ a portfolio strategy for long-term incentives to balance the advantages and drawbacks of each vehicle type, with 90% of the Top 250 companies using two or more grant types.
Long-term incentive mix continues to be strongly oriented towards performance plans with performance awards representing 55% of total long-term incentives.
Ninety-four percent of Top 250 companies grant performance awards, with 60% utilizing two or more performance metrics and 91% using a three-year performance period.
TSR increased in prevalence – now used by 62% of companies vs. 39% of companies in 2010 and 58% in 2018 –and remains the most prevalent performance metric among the Top 250 companies, with almost every company measuring it on a relative basis.
Financial metrics complement relative TSR at 78% of companies that use relative TSR as a performance metric