A long term incentive (LTI) program or long term incentive plan is a kind of executive incentive or executive compensation program that normally comes in the form of shares or performance shares of the organization. A large number of organizations are now offering their employees the opportunity to purchase long-term stock options on their own as well as those who are already employed by the organization. If you are looking to invest in the stock market but are worried about how to go about doing so, then consider investing your money in a long term incentive plan. There are various benefits associated with such an investment, which will be discussed below.
First and foremost, a long-term incentive plan has a number of advantages for both the investors and the employees. For the investors, the main advantage is that they can earn good returns on their investments without having to worry about putting in much effort and this is what makes this type of plan attractive to many people. This plan allows the investors to earn a return on their investments by means of a cash bonus or increased salary as well as the employees receive a certain percentage of the value of their stock options or performance interests each and every year. The employees receive the same percentage of the value of their stock options or performance interests each and every year regardless of how long they have been employed by the organization.
Another benefit of these plans is that the employers do not have to vest their existing employee awards. If you are looking to buy and sell stock options in the future, then you can also benefit from this type of incentive plan because your purchase will be covered with this kind of plan and will not require you to put in any extra money to make the sale. The only thing that you have to worry about in this case is whether or not the vesting provision of the plan will affect the price of your options.