Overview
What is it:
The performance period is the defined span of time over which performance is measured for a PSU or other performance-based award before a payout is determined. This is often, but not always, a single window matching the full vesting period (e.g., results measured once at the end of three years). Some plans measure performance in shorter increments within a longer grant (e.g., annual performance periods within a three-year grant).
Why does it matter:
Knowing when this window actually closes, and how it's structured, lets you correctly identify when a PSU grant will resolve into vested shares, rather than assuming the calendar dates alone determine the outcome. Even when performance is measured annually within a longer grant, the actual vesting and share delivery is typically still a single event at the end of the full period, not delivered piece by piece as each interim measurement resolves.
What do people most often get wrong:
People often assume a three-year PSU measures performance once, at the very end of three years. While that is a common design, it isn't universal. Some plans measure results annually within the same grant (like the example above), and some lock in a performance outcome earlier than the vesting date actually arrives. The vesting timeline and the performance measurement structure don't have to move in lockstep.