Long-Term Incentive Plans (LTIPs)

LTIPs are compensation strategies designed to reward employees for sustained performance over multiple years, often through stock options, bonuses, or deferred cash payments.

HR teams use LTIPs to retain top talent, align employee performance with business goals, and encourage long-term commitment to the organization.

LTIP is calculated based on an employee’s role, performance, and company-defined metrics. Typically, it includes:

• A grant value (often a % of annual salary)
• A performance multiplier based on targets (like revenue or profit)
• A vesting schedule (e.g., 3–5 years)

Example: If your LTIP grant is ₹10 lakhs, and you exceed performance goals (1.2x multiplier), and it’s fully vested, your payout would be ₹10L × 1.2 = ₹12L.

LTIPs are designed to reward long-term value creation and retain key talent.