Long term incentive plans (LTIP) are to drive short-term, mid-term and long-term performance to motivate, enhance performance and retain employees.
Long-term Incentive Plans Objectives
Create Shareholder Value
Encourage Employee Performance
Ease of Implementation
Align with Market Practice
Three Types of Long Term Incentive Plans
1. Deferred Restricted Stock Annual Bonus
Plan would encourage employee retention, drive short term performance and mitigate risk.
2. Three Year Performance Restricted Stock
Plan ties performance requirements to restricted stock allocations, driving performance over the three-year vesting period.
3. Five Year Thrift / Savings Plan
An integrated incentive and savings scheme for all company employees to buy shares.
Leaver provisions provide a basis for dealing with (good leavers and bad leavers) participants leave the organization prior to the vesting period.