Publicaties

EITC-reeks nr. 7: Relative performance evaluation in The Netherlands

This study presents an overview of the recent developments in relative performance evaluation (RPE) within long term incentive schemes. Its discusses important elements like performance standards, peer group composition and target ranges. Relative performance evaluation within long term incentive plans (LTIPs) has become common practice amongst the largest companies in The Netherlands. Based on an empirical study of the main Dutch stock market indexes, ie. the AEX, the AMX and the ASCX, for the years 2005-2007, this report describes current practice and assesses the pros and cons of various relative total shareholder return (RTSR) configurations commonly employed.

The report also provides a number of recommendations aimed at improving disclosures on remuneration and helping to improve alignment of incentive schemes and shareholder interests.

This research is a coproduction between Rotterdam School of Management, Erasmus Institute Monitoring & Compliance and Hewitt Associates. This is the second report resulting from the cooperation between Hewitt Associates and the Rotterdam School of Management on the topic of executive compensation.