Total Shareholder Return (TSR), a metric that measures the total growth in a company’s share price, has garnered widespread attention and adoption within the realm of corporate performance management, driven by an increasing demand from stakeholders for compensation models that not only incentivise immediate success but also ensure sustainable growth and value creation over time, thereby aligning the interests of executives, shareholders, and employees.

In this guide, we delve into the role of TSR in executive compensation and the intricacies of its application in long-term incentive plans. It also covers:

• A comprehensive understanding of TSR’s strategic importance.
• The methodologies for measuring TSR.
• The challenges TSR may present.
• The perspectives of various stakeholders.
• Exploring case studies.