Capping relative TSR vesting when absolute returns are negative: common or overkill?

Australian listed property group. Our long-term plan is half relative TSR against a group of 20 listed property companies and half growth in funds from operations. In the cycle that has just ended we ranked at the 78th percentile, so the TSR half vests almost in full, but shareholders lost 11% over the three years.

A committee member has proposed capping TSR vesting at 50% whenever absolute TSR is negative. Management argue that outperforming in a falling market is exactly what the measure is for.

Does anyone operate a cap like this, and did it change behaviour or just reduce pay?