Deferral
The practice of holding back a portion of an earned incentive (e.g. 25% to 50% of an earned STI) and delivering it later, often in 1 or 2 years. The deferred portion of an award is typically in equity, but cash can also be deferred. This acts as a retention hook (if also contingent on service), aligns short-term performance with long-term share price, and permits malus to be applied in the event of governance issues discovered after the fact.
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