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Performance equity provides additional upside and/or downside leverage to traditional equity incentives based on set performance goals.

So we set out to quantify how common performance measures that we see in company executive incentive plans actually related to stock market performance over the last five years.

Each category is further divided into castes, which assign occupation as well as related social and civic rights, such as place of residence, access to public spaces and conduct of oneself, including stipulations related to marriage and friendships.

Concept 1: Have a Laser-Focused Compensation Philosophy Before compensation targets and financial and non-financial metrics for incentive programs can be set, a compensation committee must adopt a compensation philosophy that drives the program’s overall structure.

A leading approach here is to be explicit about the rationale, whether it’s a succession bridge or a play to lean into complementary skill sets, and set expectations for how the team will make decisions going forward.

However, it’s important to note that the research on employee participation in goal setting is mixed, with other research finding that supervisor-set goals are more powerful than self-set goals (CIPD 2016).

You can download a graphic report of findings, a summary analysis of the trends or a short quiz that you can use to start productive goal-setting conversations in your organization.

Nearly 40% of respondents took one or more actions to address incentive plan goal-setting challenges, such as delaying the timing to finalize goals, widening performance ranges, and adding or increasing the emphasis on relative metrics.; ;Most respondents are not planning significant changes to incentive plan designs for 2026 or the short-term incentive (STI ) performance mix or long-term incentive (LTI) award vehicle mix.Most also have not made changes to equity grant practices in response to stock market volatility or proposed shareholder advisory group policy changes.; ;Among respondents with incentive cycles ending in 2025, most (roughly half for STI and 60% for LTI) do not currently anticipate the use of discretion, with one-third taking a “wait and see” approach.

Working with management, boards have to sort through all of the noise — opinions, ideas and information — and make rational, informed decisions about how to set priorities, allocate resources and make investments.

;Set boundaries.