Long Term Incentive Plans
These incentive plans have seen a surge in popularity in recent months with our customers looking to reward long-term success. Given the fact that benefits are increasingly focused on flexibility and alignment with employees’ values, it will be interesting to see if they remain popular in 10-20 years. Younger generations are increasingly challenging the status quo in terms of the legacy they hope to leave. Generally, loyalty no longer equates to greater pay packets, with data from the autumn UK Reward Management Survey indicating those who moved roles could reach higher levels of pay more easily than those who stayed; 72 per cent offered up to 10 per cent more to new employees.
Data from the UK Reward Management Survey indicated that of those who offer LTIPs, 100 per cent offer them to Main Board Directors and 86 per cent also offer them to other directors and senior executives, whilst 17 per cent offer them to function heads and senior managers, illustrating the focus of this type of benefit. The changing face of the workplace and a less hierarchical structure may see the future decline of LTIPs as an engagement tool, but these figure show that, for now, they remain popular amongst more senior levels of roles. Of course, with senior level roles traditionally being held by older generations, as the younger generations grow, there may well remain a place for LTIPs, as the priorities and motivations of individuals naturally develop.