New Data Shakes Up the RSU vs. PSU Debate—Here’s What to Know | Farient Briefings
May 15, 2025
20-Year Study of Equity Performance
Augments RSU, PSU Debate
Competition to retain and motivate top talent has accelerated the use of equity awards tied to performance.
New research by Farient Advisors and the MIT Sloan School of Management found that performance share units (PSUs) in long-term incentive plans over delivered on compensation and under delivered on performance.
PSUs have been adopted by 75 percent of the S&P 1500 since their popularity surged after a 2005 accounting change and pressure from investors and proxy advisors to better align pay and performance.
Palantir CEO Alex Karp’s eye-popping $6.8 billion compensation package in 2024—driven by a 340 percent surge in company stock—has placed him among the nation’s highest “actually paid” executives, despite receiving no new stock grants since the company’s 2020 IPO. This case underscores how founder equity and early option grants can yield extraordinary outcomes when company performance takes off.
Farient Advisors’ Chief Data Officer Eric Hoffmann told Fortune, “A more typical schedule for performance-based stock awards is three years.” Karp’s 10-year vesting period, unusually long even by tech industry standards, reveals how companies are increasingly using extended equity timelines to secure founder retention while aligning incentives with long-term value creation.
These “moonshot” pay structures, though rare outside tech, continue to raise important governance questions about risk, reward, and shareholder alignment.
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Senate Committee Hears Testimony on Proxy Advisor ‘Cartel’
Corporate governance titan Nell Minow was among those who testified on April 29 before the Senate Subcommittee on Financial Services’ hearing, “Exposing the Proxy Advisory Cartel: How ISS & Glass Lewis Influence Markets.”
Minow was the fourth employee of ISS and left the proxy advisor in 1990 as its president. Now the vice chair of ValueEdge Advisors, Minow stated categorically that there was “zero evidence” of collusion among the largest proxy advisors.
She advised the subcommittee to invite the institutional investors who subscribe to their services to testify at the next hearing.
“I am sure you will be reassured at the quality and variety of options offered by the proxy advisors and by the policies and procedures their clients apply in evaluating the small, advisory-only proposals, including those management does not support,” Minow said in closing.
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Understanding Climate Incentives
Exclusive: Around the globe, the heat is on to combat climate change while some political regimes denounce the veracity between greenhouse gas emissions and a warming planet. Nevertheless, large corporations are reporting Scope 1, Scope 2, and, increasingly, Scope 3 greenhouse gas emissions and linking reductions to executive compensation, according to Farient Advisors’ newly published 2025 Global Trends in Stakeholder Incentives: Climate Strategies and Incentives for Corporate Sustainability.
Learn more about how the world’s largest companies are setting and achieving climate goals by linking climate measures to executive incentives by sector and geography.
About Farient Advisors
Farient Advisors LLC is an independent premier executive compensation, performance, and corporate governance consultancy. Farient provides a full array of services, linking business strategy to compensation through a tailored, analytically rigorous, and collaborative approach. Farient has locations in Los Angeles, New York, and London and works with clients globally through its partnership in the Global Governance and Executive Compensation (GECN) Group. Farient is a certified diverse company and is recognized by the Women’s Business Enterprise National Council.
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