Long Term Incentive Plan

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A long-term incentive plan (LTIP) is a company policy that rewards employees for reaching specific goals that lead to increased shareholder value. In a typical LTIP, employees must fulfil certain conditions or requirements to be eligible for the scheme.

A LTIP, while geared toward employees, is really a function of the business itself striving for long-term growth. When objectives in a company's growth plan match those of the company's LTIP, key employees know which performance factors to focus on for improving the business and earning more personal compensation.