Long-Term Incentive (LTI)

“At-risk” compensation that is usually paid in forms of company equity, rather than cash (e.g. performance rights, performance share units, share appreciation rights or options). An employee has ownership (i.e. the grant of the equity award vests) on or after achievement of specific performance objectives measured over a period greater than one year (typically over 3 to 4 years) designed to align executive reward with long-term shareholder value, interests or growth. Crucially, equity compensation that vests solely on service is not considered an LTI. Many companies (often in the US and Canda) mis-label Restricted Stock Units (RSUs), or their AU equivalent, Restricted Rights, as an LTI, an issue stemming from certain US specific 1990s tax laws.