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Simple English definitions for legal terms
performance shares
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A quick definition of performance shares:
Performance shares are stocks that are given to an executive as a reward when the company achieves a specific goal or objective. These stocks are a way for companies to incentivize their executives to work towards achieving the company's goals. Essentially, if the company does well, the executive gets rewarded with stocks.
A more thorough explanation:
Performance shares are stocks that are given to executives as a reward for meeting certain performance objectives set by the corporation. These objectives can be related to financial performance, growth, or other key performance indicators.
For example, a company may offer performance shares to its CEO if the company achieves a certain level of revenue growth over a specified period of time. If the CEO meets this objective, they will receive a certain number of shares as a reward.
Another example could be a company offering performance shares to its sales team if they achieve a certain level of sales growth or customer acquisition. If the team meets this objective, they will receive a certain number of shares as a reward.
These examples illustrate how performance shares are used as an incentive to motivate executives and employees to work towards achieving specific goals that are aligned with the company's overall strategy and objectives.