Total shareholder return, for example, rose by nearly 292% over the last five years.
Temasek's total annual shareholder return has dropped to only 6% for the past ten years.
"It's bad optics to pay out at the maximum level when total shareholder return is negative, " Mr. Becker says.
But a recent study by Harvard, Wharton and Stanford found that, overall, shareholder return decreases as insiders' voting rights increase.
The trick is to find those companies that are good capital allocators with managements that understand the value of shareholder return.
"The company could not do very well in total shareholder return, and the rewards for managers could still crystallise, " Ms Wilson warned.
During the past six years DiMicco has steered the Charlotte, North Carolina company to an annualized 32% total shareholder return, well outpacing rivals.
Their performance related rewards are determined in large part by total shareholder return, which is dominated by what has happened to the share price.
More U.S. companies are limiting the stock rewards for top leaders in down years by restricting certain compensation when total shareholder return is negative.
Long term plans rely on relative performance measures such as total shareholder return relative to the average return for other companies in the same industry.
Without a ceiling, pay plans typically allow senior officers to receive up to twice as many shares, even when there is a negative shareholder return.
Senior executives of the telecom concern won't receive additional restricted shares tied to its relative stock performance if shareholder return is negative over a three-year period.
Companies with brands that delivered distinctive benefits generated total shareholder return, relative to their industries, that was 9.5 points higher than brands that were weak in delivering distinctive benefits.
Ultimately this translates into 19% greater shareholder return.
In a recent Compensation Committee meeting, one of the executives participating in the meeting asked whether or not I favor Total Shareholder Return (TSR) as a performance measure for performance share plans.
Assessing the Impact of Taxes on Shareholder Return showed owners of mutual funds in taxable accounts gave up an average of 0.98 percent to 2.08 percent in annual return to taxes over the last 10 years.
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The Alignment Reports clearly show whether or not the CEO pay of each bank was: (1) reasonable compared to the relevant market, and (2) sensitive to company performance, as indicated by Total Shareholder Return (TSR) over time.
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The software maker has generated an average return on shareholder equity of around 40% over the last five years and has a pristine balance sheet.
Heidi Sinclair, chair of the global technology practice at Burson-Marsteller, a consulting firm that carried out the research, said the study showed that companies which had a CIO on their board of directors were also the companies that had a higher return on shareholder value.
In return the major shareholder in Air Asia, Tune Air, will get a 20% stake in Malaysia Airlines.
That return to that shareholder has just fallen from 10% to 5%.
Return on equity (ROE), calculated by dividing net income by shareholder equity during a particular period, measures the return that management has produced on the money invested into the business.
He has since called for a shareholder vote in an attempt to return to the board and take control of the firm.
Something strange happens when you shift the metric from Return on Assets to Return on Equity, or shareholder funds.
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We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.
The judge backed a lawsuit by activist shareholder David Einhorn, who wants Apple to return more cash to shareholders.
In more modern times, Walmart, long thought of as the bastion of the return-profits-to-shareholder-capitalism mentality, is now a clear leader in environmental sustainability.
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It consequently learned the importance of return-on-equity and other measures of shareholder value.
Because stock ownership, even by large institutional investors, is so widely dispersed, the potential return an investor can get by being an activist shareholder is too low to justify spending his or her time and money on efforts to hold down unnecessary pay and spending.
Instead, under Section 1366(a)(1), each shareholder reports their pro rata share of income or loss on their individual income tax return.
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