Long-Term Incentives: Is It Time to Rethink Business as Usual?

For years, long-term incentive (LTI) design has followed a relatively familiar formula, with performance shares (PSUs) at the center of most executive programs. But as business conditions become more volatile, planning horizons shorten, and governance expectations evolve, compensation committees have an opportunity to reconsider whether yesterday’s approach still supports today’s strategy.

This discussion will explore how committees can take a fresh look at the LTI toolkit—including PSUs, restricted stock, stock options, and emerging approaches—and determine the right mix for their company. We’ll examine when different approaches may make sense, including the implications for performance alignment, retention, dilution, and goal-setting. Ultimately, company context, rather than prevailing market practice, should ultimately drive LTI design.