Trends in relative total shareholder return plan design

When it comes to long-term incentive (LTI) vehicles, relative total shareholder return (TSR) remains the most popular performance metric. In fact, TSR was used in more than 50% of performance awards either as a single metric or one of multiple metrics, according to WTW’s 2024 Long-Term Incentives Policies and Practices Report.

Given this prevalence, companies need to stay informed about TSR plan design practices and trends. Considering that design features can affect the associated expense, administrative burden and ultimate value delivered, we surveyed our clients to identify significant TSR award features.

The results from WTW’s 2025 Relative Total Shareholder Return Awards Survey revealed common plan design practices as well as highlight changes from our 2018 survey. The most significant changes in TSR design features from 2018 to 2025 include:

• Increased use of relative TSR as a vesting modifier instead of a standalone metric 
• Increased use of negative TSR vesting caps 
• Increased prevalence of one-month price averages used to calculate TSR 
• More uniformity in threshold and maximum percentile rankings and vesting outcomes 

The survey also contains new insights on TSR modifier vesting schedules, the treatment of bankrupt peers and TSR determinations for foreign peers.  These results can be used to compare, assess and fine-tune the design features of TSR awards. 

Download the full report to get access to all results. 

Authors

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Stephen Zwicker

Senior Director, Retirement

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Mark Daniels

Director, Retirement

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Kevin Ryan

Director, Retirement

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