Appraisal Economics Inc. has performed a valuation of long-term incentive plan units (LTIP Units) for one of the largest publicly traded real estate investment trusts (REITs). The LTIP Units were granted to employees as equity based compensation and were designed to align the interests of the grantees with company stockholders. The grants have market-based vesting conditions, whereby the LTIP Units will only vest into shares of the company’s common stock if certain total return to shareholder (TRS) targets are met. TRS is a measure of the company’s stock price performance that includes dividends. The LTIP Units have both absolute targets, based on the company’s own TRS performance, and relative targets, based on the company’s TRS performance compared to a peer group of over 100 companies. Our valuation of the LTIP Units accounted for all of these features.
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