Publication Date

10-1-2015

Abstract

• Particularly since the recent recession, the general public and policy makers have been interested in aligning the incentives of executives with the incentives of shareholders.

• Embedding Total Shareholder Return (TSR) target metrics into top executive compensation plans have been described as a simple and direct tool to align incentives.

• Despite the increased popularity of such TSR plans, the empirical evidence supporting the expansion of this compensation strategy is limited.

• This brief aims to shed light on whether the inclusion of TSR measures in long-term incentive plans result in improved firm performance.

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Recommended Citation
Enayati, H., Hallock, K., & Barrington, L. (2015). TSR, executive compensation, and firm performance (CAHRS White Paper). Ithaca, NY: Cornell University, ILR School, Institute for Compensation Studies.

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