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Over the last decade performance vesting (p-v) equity awards have displaced time vesting equity awards. By 2012 70% of large US companies granted one or more p-v awards. Based on new methods we develop and implement, we find that p-v provisions significantly amplify executive incentive alignment with shareholder interests (delta) and executive incentives to take risk (vega). Conventional measures of value, delta and vega reflect significant error. These awards are more likely to be adopted for a new CEO and more complex firms. Award usage is associated with a significant subsequent increase in stock performance, accounting performance, and firm risk JEL Classifications: M52, M55, J33, G34; G32, G13, M41.

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