Relative Total Shareholder Return Modifier Clause Samples
The Relative Total Shareholder Return Modifier is a provision that adjusts incentive compensation based on a company's total shareholder return (TSR) relative to a defined peer group over a specified period. In practice, this clause typically compares the company's TSR performance to that of similar companies, and increases or decreases payouts under long-term incentive plans depending on whether the company outperforms or underperforms its peers. Its core function is to align executive rewards with shareholder value creation in a competitive context, ensuring that compensation reflects not just absolute performance but also performance relative to the market.
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Relative Total Shareholder Return Modifier a. The payout percentage applicable to Performance-Based RSUs covered by the Award, calculated under Sections 2 and 3 above, will be subject to modification based on the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the following Comparator Group members: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation Fortune Brands Home & Security Inc. Hasbro, Inc. ▇▇▇▇▇▇ ▇▇ & Co. KGaA ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Corporation Koninklijke Philips N.V. Mattel, Inc. Societe BIC SA Spectrum Brands Holdings, Inc. Tupperware Brands Whirlpool Corporation
b. Any companies that are in the TSR Comparator Group at the beginning of the performance period that no longer exist at the end of the three-year performance period (e.g., through merger, buyout, spin-off, or similar transaction), or otherwise change their structure or business such that they are no longer reasonably comparable to the Company, shall be disregarded by the Committee in the Committee’s calculation of the appropriate interpolated percentage.
c. The Company’s ranking (in the range of highest to lowest) in the TSR Comparator Group at the end of the three-year performance period, beginning January 1, 2021, and ending December 31, 2023, will be determined by the Committee based on the TSR for the Performance Period for the Company and each of the members in the TSR Comparator Group as calculated below:
d. TSR is calculated as follows and then expressed as a percentage:
Relative Total Shareholder Return Modifier. For all Grantees who are corporate officers elected by the Board of Directors of the Corporation on the Date of Grant, the initial determination of Vested Award Units will be subject to the Relative TSR Multiplier as set forth below and applied following the end of the Performance Period so the amount of Vested Award Units that vest on the Vesting Date will reflect the application of the multiplier: 80% percentile or greater 110% of initial determination of Vested Award Units 21%-79% percentile 100% of initial determination 20% percentile or less 90% of initial determination
Relative Total Shareholder Return Modifier a. The payout percentage applicable to Performance-Based RSUs covered by the Award, calculated under Sections 2 and 3 above, will be subject to modification based on the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the following Comparator Group members:1 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation Dorel Industries Inc. Fortune Brands Home & Security Inc. Hasbro, Inc. ▇▇▇▇▇▇ ▇▇ & Co. KGaA ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Corporation Koninklijke Philips N.V. Mattel, Inc. Societe BIC SA Spectrum Brands Holdings, Inc. Tupperware Brands Whirlpool Corporation
b. The Company’s ranking (in the range of highest to lowest) in the TSR Comparator Group at the end of the three-year performance period, beginning January 1, 2020, and ending December 31, 2022, will be determined by the Committee based on the TSR for the Performance Period for the Company and each of the members in the TSR Comparator Group as calculated below: 1 Any companies that are in the TSR Comparator Group at the beginning of the performance period that no longer exist at the end of the three-year performance period, (e.g., through merger, buyout, spin-off, or similar transaction), or otherwise change their structure or business such that they are no longer reasonably comparable to the Company, shall be disregarded by the Committee in the Committee’s calculation of the appropriate interpolated percentage.
c. TSR is calculated as follows and then expressed as a percentage:
Relative Total Shareholder Return Modifier. Following the conclusion of the Performance Period, the number of Earned CAGR Performance RSUs, if any, are adjusted by applying a modifier (the “Relative TSR Multiplier”) based on the total shareholder return, or “TSR”, during the Performance Period as compared to the TSR of the Peer Group companies for the three-year period (the Relative Total Shareholder Return or “rTSR”), as set forth in the table below. If the Company’s rTSR is below the 25th percentile of the Peer Group, the Relative TSR Multiplier will be 75%. If the Company's rTSR is at or above the 75th percentile of the Peer Group, the Relative TSR Multiplier will be 125%. If the rTSR is between the 25th and 75th percentiles, the Relative TSR Multiplier will be determined based on the chart below: Less than 25th Percentile 75% Between 25th and 40th Percentile 85% Between 40th and 60th Percentile 100% Between 60th and 75th Percentile 115% Greater than 75th Percentile 125% If the rTSR is determined by the Committee to fall exactly at the dividing point between two rTSR ranges (e.g., at precisely the 25th Percentile), then result shall be deemed to fall in the higher range (e.g., “Between 25th and 40th Percentile”) and apply the greater Relative TSR Multiplier (e.g., 85%). The product of the Relative TSR Multiplier and the Earned CAGR Performance RSUs (determined in Part 1) shall determine the total number of Performance RSUs that vest (the “Vested Performance RSUs”). For the avoidance of doubt, the maximum amount of the award including the CAGR Performance Factor and the Relative TSR Multiplier may not exceed 200% of the Target RSU Award. If the CAGR Threshold Target described in Part 1 is not achieved, then the number of Vested Performance RSUs shall be zero, regardless of the Relative TSR Multiplier. Fractional Vested Performance RSUs shall be rounded up to the next whole Vested Performance RSU.
Relative Total Shareholder Return Modifier. Notwithstanding any provision herein to the contrary, the number of PSUs that otherwise become earned and vested pursuant to the Award, as determined based on the achievement of the applicable Performance Conditions, shall be subject to adjustment based on the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the subset of peer companies designated by the Committee (the “TSR Peer Group”) over the Performance Period (the “TSR Modifier”), as follows: