IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-137-40925-6_2.html
   My bibliography  Save this book chapter

Long-Term Incentive Plans

In: The Economic Psychology of Incentives

Author

Listed:
  • Alexander Pepper

    (London School of Economics and Political Science)

Abstract

In 1995 the Greenbury report1 recommended that UK companies should adopt performance-related long-term incentive plans (often known simply as “LTIPs”) for senior executives, preferring them to traditional share options. The report pointed out that stock options had a number of shortcomings: they sometimes led to windfall gains simply as a result of general movements in share prices and did not encourage directors to build up significant shareholdings in their employing companies. Reuters Group plc was the first UK listed company to adopt the new style of LTIP in 1993. Many other UK companies followed suit after 1995, influenced by the Greenbury report as well as the withdrawal of tax relief for share options granted over shares with a market value in excess of £20,000 in the 1995 budget. Since that time, LTIPs have become a major component of senior executive reward systems in UK listed companies. By 2012 long-term incentives comprised nearly 50% of the total earnings of executives in the FTSE 350, up from just under 40% in 2006.2

Suggested Citation

  • Alexander Pepper, 2015. "Long-Term Incentive Plans," Palgrave Macmillan Books, in: The Economic Psychology of Incentives, chapter 2, pages 10-25, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-40925-6_2
    DOI: 10.1057/9781137409256_2
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-137-40925-6_2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.