Long Term Incentives

Long Term Incentives are compensation awards tied to multi year performance or continued service. They align employee behaviour with company goals and help retain key talent.

Long Term Incentives reward long term performance, often through equity or deferred cash that vests over time.

What are Long Term Incentives

Long Term Incentives, often called LTI, include stock options, restricted stock units, performance shares and deferred cash. They differ from annual bonuses by focusing on outcomes over several years.

How they work

LTIs use vesting schedules and performance conditions. Employees earn value if the company hits targets or after a service period. Plans specify metrics, vesting timelines, tax treatment and payout rules.

Practical usage in HR

Organisations use LTIs to attract executives, retain high performers and link pay to strategic goals. HR, payroll and legal coordinate design, grant administration and compliance.

• Executive compensation packages combining salary, STI and LTI
• Retention grants for critical technical staff with 3 to 4 year vesting
• Performance share awards tied to revenue or total shareholder return

Related HR concepts

Related terms include equity compensation, short term incentives, total rewards, vesting, tax withholding and pay for performance. See internal policies for plan details and compliance.