Long-term incentives routinely comprise the biggest portion of an executive’s compensation. Companies offer long-term incentives to retain talent and encourage executives to realize the company’s strategic goals and objectives.
Long-term incentives are normally granted as some form of equity compensation, such as:
Typically, the equity grants will vest over a specific period of time, essentially making the executive an investor in the company’s performance. The vesting period varies by company but usually covers a period of 3 to 5 years. Long-term incentives that have not vested are typically forfeited once the executive departs the company.
