Performance-based equity plan checklist.
Seventeen checks for designing, launching, and managing a performance-based equity plan, from the goals it measures to what you tell participants.
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- Checks
From the global equity experts at Allshares, working with 1,500+ companies in 110+ countries.
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What's inside
Four sections, seventeen checks.
Two pages of checks, each with room for notes. The first sets the plan's goals. The second decides how awards are treated, brings the equity team in, and plans what participants hear.
Start here
Set the plan's goals
Choose performance measures that support the company's long-term goals, set the period they're measured over, and define how each level of performance affects the award. Then set any continued-employment requirements, review the terms, and get the approvals.
- Goal checks
- 6
Page 2
Then launch it
Awards, team, and participants
Decide how many shares participants receive for the goals achieved and document the vesting conditions. Involve legal, payroll, and accounting in the decisions, and explain performance awards, vesting, and potential tax implications to participants in plain language.
- Checks
- 11
- Sections
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Page 3
From the checklist
Six goal decisions to settle.
The checklist starts with the plan's goals. Tap each one your team hasn't settled yet.
0of 6 still open
Tap a decision to count it. Your answers stay on this page.
Who it's for
Written for the team building the plan.
It's for the HR teams and stock plan administrators putting a performance-based equity plan in place, and for the legal, payroll, and accounting colleagues the checklist brings into the decisions. It works for a public or a private company, and for performance awards such as performance share units (PSUs).
Use it to begin your plan implementation strategy. Each page has room for your team's notes.
Want help designing the plan itself? See our plan design service
Get the checklist
Common questions
Performance equity plan questions.
What should a performance-based equity plan define?
The checklist starts with six decisions: the performance measures and how they support the company's long-term goals, the period over which performance is measured, how each level of performance affects the award, any continued-employment requirements, a legal and regulatory review of the terms, and the approvals. Then it covers the vesting conditions in the award agreements and the reporting and tax requirements. For why plans go wrong before these decisions are made, read our article. Why incentive plans fail before they're designed
Who should be involved in a performance-based equity plan?
The checklist brings legal, payroll, and accounting into the decisions and keeps those teams informed as the plan and award terms are finalized. HR and stock plan administrators get ready to answer participant questions.
How do you explain performance awards to participants?
The checklist's last section has four steps. Announce what you know early, even if award details are still being finalized. Publish an FAQ participants can revisit. Explain performance awards, vesting, and potential tax implications in plain language. Then share final award decisions and next steps once they're confirmed.
Is the checklist legal or tax advice?
No. It's a checklist to work through with your team. For legal, tax, or accounting questions about your plan, talk to your counsel or tax adviser.
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