Long term incentive
A long-term incentive plan (LTI plan) is a business program designed to retain and motivate management staff and particularly talented or important employees by creating long-lasting performance incentives . Analogous to the LTI, the term mid-term incentive (MTI) is used for incentive programs that have a slightly faster effect, i.e. those that are designed for the medium term .
Originally, the German company SAP designed a profit-sharing model that included the issue of stock options and convertible bonds to selected parts of the workforce. LTI and MTI are now widely used as part of the remuneration of managers and other employees.
The function of LTI is justified, for example, by the principal-agent theory , according to which an owner (principal) has a long-term interest in profits from his business activities. Long-term incentives are useful so that his employee (agent) pursues the same interest and does not act in favor of short-term self-interests. In addition to performance-based bonuses, this also includes an LTI plan.
literature
- Hugo Kossbiel, Wilhelm Mülder, Andreas Oberweis (eds.): Business informatics . tape 42 , special issue "IT and Personal". Vieweg, Braunschweig 2000.
Individual proof
- ↑ Joachim Schwalbach : Remuneration Study 2011. (PDF) Management Board remuneration , Pay-for-Performance and Fair Pay DAX30 companies 1987–2010 (PDF). Humboldt-Universität zu Berlin , 2011, accessed on May 7, 2014 .