EPISODE · Jun 9, 2026 · 11 MIN
Why Companies Offer Performance Share Units Instead of Options
from The Compensation Podcast with Fexingo: Pay Transparency, Equity, Bonuses, and Total Comp · host Fexingo
In Episode 41 of The Compensation Podcast, Lucas and Luna unpack Performance Share Units (PSUs) — a fast-growing equity vehicle that ties payout to specific goals, not just time. They compare PSUs to traditional stock options and restricted stock units (RSUs), using Microsoft's 2025 proxy as a concrete case: 60% of its CEO's long-term incentive now comes from PSUs tied to revenue growth and operating margin targets. The hosts explain how PSUs affect employee tax treatment, retention risk, and alignment with shareholder interests. They also explore why PSU adoption surged after 2020, with data from a Willis Towers Watson survey showing 70% of S&P 500 companies now use some form of performance-based equity. A practical episode for anyone who has 'performance shares' on their offer letter and wants to understand what they're really getting. #PerformanceShareUnits #PSUs #EquityCompensation #StockOptions #RSUs #Microsoft #WillisTowersWatson #ExecutivePay #LongTermIncentives #ProxyStatement #SayOnPay #ShareholderAlignment #Vesting #TaxPlanning #Careers #FexingoBusiness #BusinessPodcast #Compensation Keep every episode free: buymeacoffee.com/fexingo
What this episode covers
In Episode 41 of The Compensation Podcast, Lucas and Luna unpack Performance Share Units (PSUs) — a fast-growing equity vehicle that ties payout to specific goals, not just time. They compare PSUs to traditional stock options and restricted stock units (RSUs), using Microsoft's 2025 proxy as a concrete case: 60% of its CEO's long-term incentive now comes from PSUs tied to revenue growth and operating margin targets. The hosts explain how PSUs affect employee tax treatment, retention risk, and alignment with shareholder interests. They also explore why PSU adoption surged after 2020, with data from a Willis Towers Watson survey showing 70% of S&P 500 companies now use some form of performance-based equity. A practical episode for anyone who has 'performance shares' on their offer letter and wants to understand what they're really getting. #PerformanceShareUnits #PSUs #EquityCompensation #StockOptions #RSUs #Microsoft #WillisTowersWatson #ExecutivePay #LongTermIncentives #ProxyStatement #SayOnPay #ShareholderAlignment #Vesting #TaxPlanning #Careers #FexingoBusiness #BusinessPodcast #Compensation Keep every episode free: buymeacoffee.com/fexingo
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Why Companies Offer Performance Share Units Instead of Options
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