Comparison of Total Shareholder Return Clause Samples
The Comparison of Total Shareholder Return clause establishes a method for evaluating a company's performance by measuring its total shareholder return (TSR) against that of a defined peer group or market index over a specified period. Typically, this involves calculating the percentage change in share price plus dividends paid, and then comparing these results to those of similar companies or benchmarks. This clause is often used in executive compensation agreements to determine eligibility for performance-based awards, ensuring that rewards are aligned with relative shareholder value creation and providing an objective standard for performance assessment.
Comparison of Total Shareholder Return. Except as provided in Section 5, the Performance Shares covered by the Award shall be deemed earned based on where the Corporation’s total shareholder return during the Performance Cycle ranks in relation to the total shareholder returns of the Comparison Companies during such period. For purposes of calculating the total shareholder return of the Corporation and the Comparison Companies during the Performance Cycle, the value of each such company’s stock at the beginning and end of the Performance Cycle shall be established based on the average of the averages of the high and low trading prices of the applicable stock on the principal exchange on which the stock trades for the 15 trading days occurring immediately prior to the beginning or end of the Performance Cycle, as the case may be. Such averages for each such company (including the Corporation) shall be referred to herein as the “Beginning Average Value” and the “Ending Average Value.” As soon as practicable after the completion of the Performance Cycle, the total shareholder returns of the Comparison Companies will be calculated and ranked from highest to lowest. The Corporation’s total shareholder return will then be ranked in terms of which percentile it would have placed in among the Comparison Companies. In calculating the total shareholder return with respect to either the Corporation or any of the Comparison Companies, the Committee shall make or shall cause to be made such appropriate adjustments to the calculation of total shareholder return for such entity (including, without limitation, adjusting the Beginning Average Value) as shall be necessary or appropriate to avoid an artificial increase or decrease in such return as a result of a stock split (including a reverse stock split), recapitalization or other similar event affecting the capital structure of such entity that does not involve the issuance of the entity’s securities in exchange for money, property or other consideration.
Comparison of Total Shareholder Return. Except as provided in Section 5, the Performance Units covered by the Award shall be deemed earned based on where the Corporation’s total shareholder return during the Performance Cycle ranks in relation to the total shareholder returns of the S&P 500 Comparison Companies and the Peer Group Comparison Companies, as applicable, during such period. For purposes of calculating the total shareholder return of the Corporation and the S&P 500 Comparison Companies and the Peer Group Comparison Companies, as applicable, during the Performance Cycle, the value of each such Corporation’s