News & Events Posted on: 5/01/2014
Scottsdale, AZ – May 1, 2014 – Equity Methods, the international leader in equity compensation compliance solutions, today introduced AwardTraq, an easy-to-use web-based service that provides companies with real-time visibility into the performance of Relative Total Shareholder Return (TSR) awards. Using AwardTraq, compensation and benefits professionals can generate customized reports that accurately calculate current percentile rankings and payout values, and illustrate those results in narrative, graphical, and tabular formats—eliminating the confusion and frustration surrounding TSR performance tracking. AwardTraq lends automation, accuracy and total transparency to the TSR performance tracking process, helping companies unlock the incentive effects of TSR awards by facilitating more frequent and informative communication with participants about award status and payout potential.
Relative TSR awards are increasingly viewed as strategic forms of compensation by publicly traded companies. Rather than setting a simple operational or stock price target for participants to hit, Relative TSR awards base payout amounts on a company’s own stock return ranked in comparison to the returns of a basket of peer firms or an index. While TSR awards are appealing to shareholders, many companies find that getting the most from a TSR award program can be tricky for two reasons. First, constructing accurate return rankings can involve accounting for index delistings, equity restructurings, mergers, dividends and other potential data anomalies for a large number of firms. Second, lack of real-time status updates during the performance measurement period can shatter visibility into the cause-and-effect relationship between participants’ actions and the award payouts they will ultimately receive—dampening the incentive effects of TSR awards.
“Generating accurate, timely TSR calculations and communicating the updated results in a clear and intuitive way are challenges for compensation and benefits teams,“ says Takis Makridis, President and CEO of Equity Methods. “We built AwardTraq because we see that numerous companies are recording massive TSR award costs in their financials without necessarily realizing commensurate benefits: if the people receiving the awards see them as lottery tickets rather than performance-based incentives, then where is the ROI? AwardTraq empowers compensation professionals with the ability to generate easy-to-read, visually appealing reports on TSR awards with the click of a button. It makes clear, frequent messaging to award recipients possible.”
AwardTraq Complements a Full Suite of TSR Award Services
Equity Methods assists companies and their boards’ outside compensation consultants through all phases of the TSR Award process – from robust quantitative analytics on competing award designs to ongoing, post-grant tracking via AwardTraq. Equity Methods’ comprehensive suite of TSR Award Services includes:
- Pre-Grant TSR Analytics: Comprehensive evaluation of specific award terms to facilitate cost-benefit comparisons across potential awards and avoid negative surprises.
- Formal Award Valuation and Accounting: Initial ASC 718-compliant valuations, liability award refreshes, ASC 260 EPS calculations, and comprehensive audit support.
- TSR Performance Tracking: Real-time access to the TSR award ranking data and current award payout amounts via AwardTraq.
Pricing and Availability
AwardTraq is now available and pricing is determined based on client’s unique Relative TSR Awards and requirements. For more information about AwardTraq, please visit http://www.equitymethods.com/awardtraq.php. To learn more about our comprehensive suite of Relative TSR Award Services, please visit www.equitymethods.com/relativetsrawards.php.
About Equity Methods
Equity Methods is the international leader in equity compensation compliance solutions, having supported more than 450 companies throughout all phases of ASC 718 compliance. From award valuation to customized financial reporting, Equity Methods’ consultative, technology-enabled approach has served over 27 of the Fortune 100. To learn more about how Equity Methods helps clients with their equity compensation valuation and reporting, please visit www.equitymethods.com or call 480-428-3344.