Chapter 8Long-Term Incentives
The essential difference between long-term and short-term incentives is the length of the performance period; whereas short-term incentives are typically based on a one-year period, long-term incentives are multiyear in nature. Some would further break up long-term incentives into midterm (e.g., three to five years, such as restricted stock and performance unit plans) and long term (e.g., more than five years, such as stock options and stock appreciation rights). However, this chapter will combine these latter two categories under long-term incentives.
Long-term incentive plans that pay off in company stock are often ...
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