Hoping for some input from Super I among others… A publicly traded company has performance share units (“PSU”) instead of traditional stock options in its LTIP. A director argues that this plan is more detrimental to reported EPS vs. options. I want to understand why this is the case as the earnings hit should be the same, but maybe the dilution calculation is different? What am I missing here? Details on the PSU plan: The PSUs have a 3-year vesting period and the amount of awards issued depend on the 3-year compounded ROE over the performance period. The target amount of PSUs to be granted are based on a 15% ROE. If the actual ROE is higher than 15% then the amount of awards increases 10% for every point in ROE but is capped at 2.0x target (at 25% ROE.) The same scale is true on the downside, namely, at 5% ROE there are zero awards. The plan has the benefit of leveraging the value of equity comp more than options because not only is the value per share higher if you achieve higher than the target, but you get more awards as well.