A performance award is generally issued with a target number of shares, an achievement timeline, its metric(s), and a minimum and maximum award. Minimum/maximum awards are typically based on how effectively you meet your metrics, such as whether you reach 0%, 50%, 100%, 150%, or 200% of your target within the designated timeline.
For example, a simple illustration may look like this:
- Target Shares: 5,000
- Timeline: 3 Years
- Performance Metric: Net Revenue
- Payout Thresholds
- Minimum: 0% of Target
- Target: 100%
- Maximum: 200% of Target
There can be variations on every offer, so always read the fine print which is most likely to be found in your grant agreement and notice than in the stock plan itself.