Performance metrics are goals or objectives specified by a company for which its executives will be rewarded in the form of incentive compensation. As an integral part of a pay for performance philosophy, performance metrics are a key focus for companies and boards during the pay design process. Metrics may be financial, non-financial, or market-based, strategic or operational, absolute or relative. Financial metrics are commonly based on profit, growth and return on investment (or some combination of the three) while non-financial metrics may involve indicators such as safety, innovation, or customer satisfaction. Market metrics are based on stock price, the most common of which is relative total shareholder return (TSR). Although relative TSR is favored by investors as the best indicator of alignment of executive compensation with shareholder interests, it may not make sense for a company to utilize TSR as its sole or even primary incentive plan metric because executives often do not have the same line of sight between their decisions and shareholder value in the near term. The Center believes that companies should select metrics which support their business strategies and goals, including that such metrics are consistent with an increase in shareholder value in the long-term.