According to WorldatWork, the prevalence of LTIs in private companies increased from 35% in 2007 to 62% in 2019. Given the current hyper-competitive market combined with volatile macro conditions of 2023 and beyond, the majority of private companies in every US industry are adopting or rethinking their LTI program. Getting into LTI design mechanics can be tricky territory.

Questions such as:

• Should we use cash or stock in the LTI plan?
• Who do we include in the LTI plan?
• Should we provide interim liquidity or force to hold?
• Should the LTI be performance-based or retention-based?
• Should we allow tax deferral rights?
• And the list goes on.

To help this, we’ve provided a quick guide for alternatives for a cash-based LTI plan. In this downloadable chart, we cover what they’re called, what circumstances could work best, how they work, and pros & cons.

While this chart won’t be the end-all for cash-based LTI plan design, it must provide a solid foundation to steer some initial decision-making around a critical component of variable pay.