How do I enter performance conditions for a Relative TSR model plan?

Comparing to an Index:

To calculate your fair value, we need to capture the performance conditions applied to this plan.

We will capture these conditions using the onscreen table. To correctly calculate the fair value here are a few tips and rules to follow:

  • You can add a row by clicking the blue '+' button and delete a row by clicking the cross at the end of the row.
  • On the condition side, there should be no gap in numbers between rows. For example if row 1 'Condition to' cell reads 10%, then the 'Condition from' of the following row must also be 10%.
  • The 'Condition to' cell is exclusive and the 'Condition from' is inclusive.
  • If a condition is equal to a single number then please enter the same number in the 'Condition from' and 'Condition to' cells in the row (i.e. for conditions equal to 10% then enter 10% in both 'Condition to' and 'Condition from' cells).
  • The last row should be read as 'Condition from' and greater (i.e. 25% and greater).
  • A Prorata function is a straight line vesting calculation from the 'Vesting from' number to the 'Vesting to' number entered in the corresponding row.
  • A 'Stepwise' function means that the entire percentage of shares indicated in the Vesting part of the table will vest upon reaching the condition. Only the 'Vesting from' cell needs to be filled in.

Here are some examples:

  • If the condition is less than the index (compounded), then the 'Condition from' cell is blank and the 'Condition to' cell should read 100%.
  • If the condition is equal to the index (compounded), then the 'Condition from' cell should read 100% and the 'Condition to' cell should also read 100%.
  • If the condition exceeds the index (compounded), then the 'Condition from' cell should read 100% and the 'Condition to' cell is left blank, unless there is another condition around exceeding index by a number of times. In that case the 'Condition to' cell should read this number of time expressed in a number, for example exceed times 1.5 needs to be entered as 150%.
  • In that last case the last row 'Condition from' cell should read 150% and the 'Condition to' cell is blank.

 

Comparing to a group:

To calculate your fair value, we need to capture the performance conditions applied to this plan.

We will capture these conditions using the onscreen table. To correctly calculate the fair value here are a few tips and rules to follow:

  • You can add a row by clicking the blue '+' button and delete a row by clicking the cross at the end of the row.
  • On the condition side, there should be no gap in numbers between rows. For example if row 1 'Condition to' cell reads 10%, then the 'Condition from' of the following row must also be 10%.
  • The 'Condition to' cell is exclusive and the 'Condition from' is inclusive.
  • If a condition is equal to a single number then please enter the same number in the 'Condition from' and 'Condition to' cells in the row (i.e. for conditions equal to 10% then enter 10% in both 'Condition to' and 'Condition from' cells).
  • The last row should be read as 'Condition from' and greater (i.e. 25% and greater).
  • A Prorata function is a straight line vesting calculation from the 'Vesting from' number to the 'Vesting to' number entered in the corresponding row.
  • A 'Stepwise' function means that the entire percentage of shares indicated in the Vesting part of the table will vest upon reaching the condition. Only the 'Vesting from' cell needs to be filled in.

Here are some examples:

  • If your first condition is that 50% of the performance rights vest if your company ranks in the top half of the group, then the first two rows of the table should be as follows:
    • Row 1: 'Condition from' cell is 0% and 'Condition to' cell should be 50% with the vesting cells reading 0%. The function is Stepwise.
    • Row 2 (to be added): 'Condition from' cell should be 50% and 'Condition to' cell should be 100% with the 'Vesting from' cell reading 50%. Leave the 'Vesting To' cell blank. The function is Stepwise.
  • If your next condition is that 100% of the performance rights vest if your company outperforms all members of the peer group then the following row should be as follow:
    • Row 3: 'Condition from' cell should be 100% and 'Condition to' cell should be left blank with the 'Vesting from' cell reading 100%. Leave the 'Vesting To' cell blank. The function is Stepwise.

 

Comparing to selected competitors (Let me define the group):

To calculate your fair value, we need to capture the performance conditions applied to this plan.

We will capture these conditions using the following table. To correctly calculate the fair value here are a few tips and rules to follow:

To calculate your fair value, we need to capture the performance conditions applied to this plan.

We will capture these conditions using the onscreen table. To correctly populate this table here are a few tips and rules to follow:

  • You can add a row by clicking the blue '+' button and delete a row by clicking the cross at the end of the row.
  • On the condition side, there should be no gap in numbers between rows. For example if row 1 'Condition to' cells reads 50th percentile, then the 'Condition from' of the following row must also be the 50th
  • The 'Condition to' cell is exclusive and the 'Condition from' is inclusive.
  • If a condition is equal to a single number then please enter the same number in the 'Condition from' and 'Condition to' cells in the row (i.e. for conditions Equal to 50th percentile then enter 50 in both Condition to and from cells).
  • The last row should be read as 'Condition from' and greater (i.e. at or above 50th percentile if the number 50 was entered in the 'Condition from' cell of the last row).
  • A Prorata function is a straight line vesting calculation from the 'Vesting from' number to the 'Vesting to' number entered in the corresponding row.
  • A 'Stepwise' function means that the entire percentage of shares indicated in the Vesting part of the table will vest upon reaching the condition. Only the 'Vesting from' cell needs to be filled in.
Was this article helpful?
0 out of 0 found this helpful