What is a Long Term Incentive Plan (LTIP)?

An LTIP is not a specific type of share plan but a general term for any plan that releases shares to senior executives over a long period — normally at least three years, and often five or more — subject to stretching performance targets.

Because the participant receives the whole value of the share rather than just the growth above an exercise price, a company can deliver the same reward using fewer shares, which helps with dilution. They are most common in larger and listed companies.

Read more about LTIPs.