Six companies disclose longer-horizon RSU plans for executives in 2026 proxies, FW Cook finds
FW Cook identified six companies whose 2026 proxy statements disclose moves to longer-horizon RSUs for executives. ISS's November 2025 policy change gave compensation committees more room to weight equity toward time-based awards.
The Board Room · Leadership desk
Three figures. ISS's new policy accepts time-based awards at 50% or more of the LTI mix, potentially 100%, when vesting and holding combine to at least 5 years. One qualifying route: 4-year ratable vesting, then a one-year post-vesting hold.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Vesting plus holding period ISS requires, at least | 5 years | 9 | |
| Time-based share of LTI mix ISS accepts | 50% or more | potentially 100% | 9 |
| Ratable vesting route | 4 years | then a one-year post-vesting hold | 10 |
What happened
- For much of the last decade, the usual design paired time-based RSUs with PSUs and put at least half the equity value in performance-based awards.
- Many of the six companies operate in cyclical, seasonal or otherwise volatile businesses where reliable long-term performance goals are hard to establish.
- ISS now accepts time-based awards at 50% or more of the LTI mix, even potentially 100%, when vesting and holding combine to at least five years.
- The authors say investors have raised concerns that PSU programs are hard to understand, sensitive to multi-year goal assumptions, and less retentive when expectations deteriorate.
Why it matters
- decision A committee can keep its PSU program, go to 100% time-based equity, or pick a design between the two, and the authors describe the middle ground as available.
- constraint A grant that vests in three years with no holding period falls outside the room ISS created, so a committee has to lengthen the schedule as well as raise the RSU share.
- precedent The authors say the case is strongest for companies with long investment horizons or exposure to regulatory change, cyclicality and forecasting problems, so we'd expect further disclosures from those sectors first.
- cost The cost the authors put on PSU programs is complexity: some companies answer weak or forfeited awards with separate retention grants, adding another layer.
Longer-horizon RSUs swap one kind of risk for another. In our view, a committee that adopts them gives up goal-setting risk and takes on stock-price exposure. FW Cook's Stephan Bosshard, Desmond Pang and Michael Marino say longer-horizon time-based equity may offer simplicity and predictability, reinforce sustained ownership and retention, and reduce reliance on multi-year performance goals that can be hard to set [16]. They add that RSUs keep executives continuously exposed to the stock price and preserve retention value through strong and weak operating periods [15].
The same post keeps the case for performance awards. The authors say PSUs can be effective when the metrics are measurable, tied to long-term value creation, and give management clear line of sight to performance [18]. On the other design, they wrote: "This does not mean that a 100% RSU program is now the preferred answer." [13]
Two structures are named for meeting ISS's test. Five-year ratable vesting qualifies, and so does four-year ratable vesting followed by a one-year post-vesting holding requirement [10].
The evidence for movement is a small sample. FW Cook identified several companies across industries [3], and the post does not say how many proxy statements it reviewed to find them. Its table, headed as examples of companies transitioning, covers six [4]. A skeptic would say six is an anecdote. On the count, that is fair. What the sample does show is that some committees have already put longer-horizon designs in front of shareholders, and the post calls these forward disclosures [6]. We do not yet know how many committees looked at the option and kept their PSUs.
The authors expect more complete proxy disclosure in 2027 [7]. A committee that adopts a longer-horizon design this cycle will therefore be read against fuller detail than the six companies' forward disclosures gave.
What to watch
- The 2027 proxy statements, where the authors expect more complete disclosure of the six companies' vesting and holding terms.
- Whether companies outside cyclical, seasonal or long-horizon industries begin disclosing similar transitions.
- Whether committees choose intermediate designs that keep some PSUs or go straight to the high time-based share ISS now allows.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence40
- Adoption15
- Hype gap−5
- Incentives45
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Stephan Bosshard (Principal), Desmond Pang (Consultant) and Michael Marino (Managing Director) of FW Cook wrote the report on which the post is based.
- [2]
ISS made a policy change in November 2025 providing greater flexibility for the use of time-based equity with extended vesting and/or holding requirements.
- [3]
FW Cook identified several companies across industries that disclosed transitions to longer-horizon RSUs in their 2026 proxy statements.
- [4]
The post's table, under the heading 'Examples of Companies Transitioning to Longer-Horizon RSUs', summarizes LTI program modifications adopted by six companies across a range of industries, based on 2026 proxy disclosures.
- [5]
Many of the six companies operate in cyclical, seasonal or otherwise volatile business environments where establishing reliable long-term performance goals can be challenging.
- [6]
Several companies have already forward-disclosed transitions to longer-horizon RSUs.
- [7]
More complete proxy disclosure regarding these programs is expected in 2027.
- [8]
For much of the last decade, the prevailing U.S. executive long-term incentive model combined time-based RSUs with PSUs, placing at least half of the equity value in performance-based awards.
- [9]
Under ISS's new policy, a company can use time-based awards for 50% or more of the LTI mix, even potentially 100%, without favoring a majority performance-based mix, provided the awards are subject to a combined vesting and holding period of at least five years.
- [10]
The five-year concept can be achieved through five-year ratable vesting or four-year ratable vesting followed by a one-year post-vesting holding requirement.
- [11]
Investors have raised concerns that PSU programs can become difficult to understand, sensitive to multi-year goal-setting assumptions, and less retentive when performance expectations deteriorate.
- [12]
In some cases, companies respond to weak or forfeited performance awards with separate retention grants, adding another layer of complexity.
- [13]
The authors wrote: "This does not mean that a 100% RSU program is now the preferred answer."
- [14]
The authors say committees considering a change do not need to choose between maintaining the current program and moving immediately to 100% time-based equity, and that intermediate designs are available.
- [15]
Longer-horizon RSUs are transparent, keep executives continuously exposed to stock-price performance, and preserve retention value through both strong and weak operating periods.
- [16]
Longer-horizon time-based equity may offer greater simplicity and predictability, reinforce sustained stock ownership and retention, and reduce reliance on multi-year performance goals that can be challenging to establish in certain business environments.
- [17]
The authors say these considerations may be particularly relevant for companies with long investment horizons or exposure to factors such as regulatory change, cyclicality, and long-term forecasting challenges.
- [18]
Performance awards can be effective when the underlying metrics are measurable, tied to long-term value creation, and provide management with clear line of sight to performance.
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Sources
1 independent publisher whose own reporting we read for this story.
- corpgov.law.harvard.eduRethinking Long-Term Incentive Design: Are Longer-Horizon RSUs Gaining Ground?
1 article · October 14, 2026
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