A grant of shares (or phantom stock) that is contingent on performance toward stipulated corporate goals. Technically, these grants can be in the form of performance stock awards (PSAs), which are similar to restricted stock, or performance stock units (PSUs), which are similar to restricted stock units. Both vest or deliver the shares upon the meeting of performance goals. When in the form of performance units, each unit has a designated dollar value, with payment in stock, cash, or a combination of both.

For details, see a related FAQ.