A Long Term Incentive Plan (LTIP) is a deferred compensation strategy that helps employers retain valued talent by rewarding employees for meeting specific performance goals. The goals, determined by the company as key to the organization’s success, may or may not be tied to the price of company stock shares or the company’s value¹.
LTIP prevalence: 98% of public companies provide LTIPs while 63% of private companies offer LTIPs². The employee, who is normally a senior executive, is required to meet a number of criteria to receive the incentive³. For example, the chief executive officer may have incentives to increase a company’s market capitalization⁴.
(1) Long-Term Incentive Plan (LTIP) Guide - GlobalShares.com. https://www.globalshares.com/academy/long-term-incentive-plan-design-what-you-need-to-know/.
(2) Long Term Incentive Plan - A Guide to LTIP| Decusoft. https://www.decusoft.com/what-is-a-long-term-incentive-plan-ltip/. (3) Long Term Incentive Plan (LTIP) | Definition | Types | Example. https://www.financestrategists.com/financial-advisor/long-term-incentive-plans/.
(4) Long-Term Incentive Plan (LTIP) Guide - GlobalShares.com. https://bing.com/search?q=Long+Term+Incentive+Plan+%28LTIP%29+sample+usage. (5) LTIPs and Private Companies: Seven Questions | Pearl Meyer. https://www.pearlmeyer.com/knowledge-share/article/ltips-and-private-companies-seven-questions.
(2) Long Term Incentive Plan - A Guide to LTIP| Decusoft. https://www.decusoft.com/what-is-a-long-term-incentive-plan-ltip/. (3) Long-Term Incentive Plan (LTIP) Definition and Types - Investopedia. https://www.investopedia.com/terms/l/long_term_incentive-plan.asp.
(4) Tax Implications of Executive Pay: What Boards Need to Know. https://corpgov.law.harvard.edu/2017/02/08/tax-implications-of-executive-pay-what-boards-need-to-know/.
(5) What Is a Long-Term Incentive Plan (LTIP)? (Plus Different Types) - Indeed. https://www.indeed.com/career-advice/career-development/ltip.