A Long-Term Incentive Plan (LTIP) is a corporate policy that rewards employees for achieving certain goals that lead to greater shareholder value. In June 2016, the Board of Directors of Konecranes PLC approved a new action-based LTIP for major employees. The plan provided for competitive rewards based on the acquisition and accumulation of shares in the company. The shares paid under the plan could not be transferred during the lock-in period, from the payment of the premium, and ended on December 31, 2018. As a general rule, the company has a vesting schedule that determines the value of the pension account contributions that a workforce can support when leaving the company. A company generally keeps part of its contributions during the first five years of an employee`s employment. Once a worker is fully equipped, he has all his pension contributions. The incentive plan helps to maintain the best talent in a highly competitive work environment, as the company moves in pre-defined and potentially lucrative directions. A long-term incentive plan (LTIP), aimed at employees, is generally a function of the company itself, which aspires to long-term growth. If the goals of a company`s growth plan match those of the company`s LTIP, key employees know what performance factors they need to focus on to improve the business and earn more personal compensation. A kind of LTIP is the 401 (k) retirement plan.
If a company is a percentage of an employee`s salary that goes into the plan, employees are more likely to work for the company until retirement. Stock options are another type of LTIP. After a specified period of employment, workers can acquire company shares with a discount, while the employer pays the balance. The seniority of the workforce in the organization increases with the percentage of shares held. In other cases, the company may provide employees with limited inventory. For example, the worker may have to sell gifted shares if he resigns within three years of receiving the stock. For each additional year, the worker may have rights to 25% of the talent stock.