Glass Lewis Pay for Performance Scores – Test Breakdown – EMEA

Overall Score

Performance against each test in our scorecard results in points being added to the overall alignment score for your company. An overall score and concern level are generated based on the final result.

  • Severe Concern: 0 to 20 points
  • High Concern: 21 to 40 points
  • Medium Concern: 41 to 60 points
  • Low Concern: 61 to 80 points
  • Negligible Concern: 81 to 100 points

About the Tests

Total Vested CEO Pay vs. TSR

  • Relative compared to Glass Lewis peers.
  • Five-year weighted average measurement period (three years minimum)

Total Vested CEO Pay vs. Financial Performance

  • Relative compared to Glass Lewis peers.
  • Five-year weighted average measurement period (three years minimum)
  • See Performance Metrics section for full list.

CEO STI Payouts vs. TSR

  • Payout as percentage of maximum opportunity.
  • Relative to regional benchmarks.
  • Measured over five one-year periods and averaged.

CEO LTI Payout vs. TSR

  • Payout as percentage of maximum opportunity.
  • Relative to regional benchmarks.
  • Measured over five one-year periods and averaged (three years minimum).

Alternative Test to Tests 3 and 4 - Multiple of Median

  • Total CEO vested pay vs. company size (market cap, revenues, total assets).
  • Relative to regional peers.
  • Alternative may be applied due to sample size and disclosure limitations.

Qualitative Test

  • Any one-off awards granted?
  • Any upward discretion exercised?
  • Is fixed pay greater than variable pay?
  • Are incentives unlimited or are limits not disclosed?
  • Is maximum LTIP payout potential excessive?
  • Is there a short vesting period for LTIs?
  • Are any performance goals not disclosed?
  • Are payouts disclosed for the latest year under review?

Performance Metrics

All sectors: Revenue growth, return on equity, and return on assets.
Sector-specific:
  • Banks/Financials/Mortgage REITs (excluding payment systems GICs): Annualised TBV per share and EPS growth.
  • Equity REITs and specialized REITs (excluding timber REITs and communication tower REITs): FFO growth and operating cash flow growth.
  • All other sectors: EPS growth and operating cash flow growth.