Gain leaders’ trust to sharpen the

human capital agenda

Understand business imperatives,

connect people initiatives

Navigate across contexts to create

tangible impact

Learners

empowered

through bespoke

projects last year

Course

recommendation

score

Journeys covering

HR across roles

and career stages

Alumni

refer someone

for a course

HR

Professionals

empowered to

impact business

outcomes

Flagship certificate courses for HR

professionals

Bespoke HR capability journeys for

organizations

Registration

E-Learnings

Online Discussion

Learning Lab

Assignment

Comprehensive

Assessment

LTI is defined as ‘Variable compensation earned over a period of more than 12 months’

Long Term Incentives

Share Based Cash Based

– Stock Options

– Stock Settled

SARs

– Restricted Stock

– Performance Shares

Full Value

SharesAppreciation

Based

– Cash Settled SARs /

Phantom Stock

OtherAppreciation

Based

– Phantom Units

– Long Term Performance

Cash

– Long Term Cash Plan

– Profit Share Plan

Indirect

The exact nature of Long Term Incentive pay depends on the employee behaviors that the plan is trying to

drive as well as the business outcomes it is trying to achieve

It is important that the plan objectives are clearly articulated and the plan design is aligned with the same.

This is critical to ensure success of the plan.

Ownership: Gives

employees a stake in the firm

and nurtures a ‘growth

partnership’ between

executives and shareholders

Sustained Performance:

Rewards long term

performance rather than short

term spikes. Encourages

employees to think of long

term health of the company.

Retention: Can help retain

critical employees through

retention hooks as it makes

the cost of separation high

Competitive Advantage:

Can attract top talent from the

industry thus enabling the

organization to build its

competitive advantage over

time

Motivation: Clear line of

sight of personal growth, tied

with company’s sustainable

growth, is a source of

motivation

Agency Theory: Addresses

problems associated with

agency theory of corporate

governance. Helps

shareholders (principals) build

trust on executives (agents)

Wealth Creation: Ensures

that performance translating

into financial success of the

firm lets employees create

and accumulate wealth in the

long-run

Communicates Commitment:

Compensation of executives

through LTI reflects their

commitment towards the

organization and drives a positive

growth mindset

Employer View

Employee View

• Business strategy

• Long term business plan

• Stage of the organization life-cycle

• Alignment to overall rewards strategy

• How much and how to pay

• How much to differentiate

• Gap from the desired pay positioning

• Possible issues in integration etc.

• Internal parity

• Specific information about competitors for talent

• Awareness of market best practices

• Application of learnings to own context

• Financial feasibility

• Account for drain on financial resources

• Assess shareholder comfort

• Compliance with Rules and regulations

• Governance imperatives

• Best practices

Choosing the right LTI

instrument that meets

the plan objectives

Who should participate in

the LTI plan

How do determine the

Target LTI value

Time period that should

lapse before employees

can exercise their options

Performance criteria

employees or the firm

should meet for award /

options to vest

Time available to

employees to exercise

their vested stock based

awards

12

Clear

Alignment with

Objectives

Simple to

understand

Stakeholder

Acceptability

Properly

communicated

& Implemented

Stable yet

Flexible

Compliant

Properly

Governed and

Administered

Fair &

Transparent

An Effective

LTI Plan

Online Learning Modules* Online Discussion Boards*

Learning journey spanning across two contact classes and a comprehensive online assessment

*Active for one year

Day 1 Day 2 Assessment

LTI Strategy

&

Instruments

Final

AssessmentLTI Design

Design

Simulation

Post Design

ConsiderationsGovernance

E-learning

Class Participation

Assignments

Final Assessment

• Final Assessment can only be taken

after attending all five modules

• Minimum 50% is required in the final

assessment

• At least 50% aggregate score is required to

complete the certification

Objectives

Outcomes

• Articulate how LTI drives business outcomes and

employee behaviors

• Position LTI as a competitive advantage for the

employer

• Differentiate between different LTI instruments and

understand implications of each

• Select stock-based or cash-based vehicles as per

their relevance to organizational context

LTI Strategy & Instruments

The ‘what’ and ‘why’ of LTI

• Integrate LTI into the total rewards strategy of an organization

• Assess the need of having LTI in an organization

• Understand what an effective LTI strategy should be

• Explore different share-based and cash-based LTI vehicles like

Stock Options, Restricted Stock, Performance Shares, Long

Term Cash and Phantom Stock

Objectives

Outcomes

• Define key plan design elements such as eligibility, quantum,

plan period and performance conditions

• Understand option pricing technique and determination of grants

• Gather conceptual understanding about expensing of share

based payments & impact on Dilution and Earnings per Share.

• Learn about key regulations governing LTI, expensing and tax

implications in India through an excel based activity

• Understand market prevalence of LTI instruments

LTI Design

Introduce design considerations

• Outline LTI plan features in line with objectives

• Build capability to deal with complexity in LTI design

• Compute potential benefits for the employee

• Compare benefit to employees with the cost to the

company for select LTI instruments

• Incorporate market information in LTI design and

implementation

Objectives

Outcomes

• Recognize key drivers and outcomes of an LTI plan

• Visualize the LTI design process through a simulation of different

business contexts.

• Draft LTI Plans in line with the business scenario and HR

context

• Apply various techniques related to LTI to see impact on related

aspects

Design Simulation

Technicalities of LTI Plan design

• Appreciate real time challenges associated with LTI

plan design

• Focus on what’s relevant with respect to LTI plan

design and solve for the key problem areas

• Understand the expensing nuances through a case

study

• Enhance LTI plans based on organizational context

Objectives

Outcomes

• Appreciate the approval process for different LTI plans

• Learn about stock based plan with no equity dilution

• Identify alternate approaches to determination of option grants

• Understand treatment of LTI in special cases such as New Hire,

M&A and modification of an existing scheme

• Learn about commonly followed retirement and termination

provisions• Learn alternative approaches to deciding select plan

features

• Appreciate and resolve special situations post plan

design

• Deal with LTI grants from previous employer in case

of a new hire

• Modify LTI plans based on critical external or internal

changes

Post Design Considerations

Special topics in LTI

Objectives

Outcomes

• Recognize risks associated with LTI

• Understand LTI plan governance and the role it plays in

implementation

• Learn about evolved Corporate Governance practices

• Emphasize need for transparency and stakeholder buy-in for LTI

strategy and plans

• Be aware of potential risks to long term employee

behaviors

• Ensure LTI plans are designed and implemented

within governance structures

• Enable smooth transition from design to

implementation of LTI plans

Governance

Managing risks associated with LTI

Anubhav leads Aon’s Executive Compensation and

Governance practice in South Asia. He has been working in

this area for more than 12 years and specializes in designing

long term stock and cash based incentive programs, executive

pay benchmarking and structuring.

He also leads the technical side of share based compensation

for Aon in India and works extensively in the areas like fair

value calculation for share based compensation programs for

grant size and expense determination under Indian GAAP, US

GAAP and IFRS.

Anubhav has worked extensively in the area of Executive

Compensation across industries like manufacturing, BFSI,

IT/ITES, Pharmaceuticals and FMCG. He works closely as a

consultant to Nomination and Remuneration Committee of the

Board for number of companies and advise them specifically

on executive compensation and long term incentives matters

Anubhav also works with Nomination and Remuneration

Committees on defining the evaluation process for the Board,

Committees and Directors, articulation of remuneration

philosophy for Directors, Key Managerial Personnel and

Senior Management

Anubhav Gupta

Director,

Executive

Compensation and

Governance

Anubhav's Mantra

Keep it simple

Dinkar works in the area of executive compensation including

design of short and long term incentive programs, executive

pay benchmarking, non-executive director compensation

benchmarking and board evaluation.

He is also involved in the technical side of share based

compensation and focuses on fair value calculation for share

based compensation programs for grant size and expense

determination under Indian GAAP, IFRS and IND-AS.

Dinkar partners with various clients across industries, and in

different life cycle stages on different elements of Executive

Compensation and Governance.

Prior to joining Aon, Dinkar worked as a macro economist

covering emerging Asia and Latin America and later led the

business strategy and planning team at a large multinational

bank.

Dinkar Pawan

Consultant,

Executive

Compensation and

Governance

Dinkar's Mantra

Details create the

big picture

Sanford I. Weill

In his current role at Aon, Aditya has worked extensively for

executive compensation benchmarking for CEO and top

management teams. He has also worked on designing long

term incentive plans in listed as well as unlisted

companies, across various stock based and cash based

vehicles. Aditya has also worked on board compensation

assignments. His research in the area of compensation has

been published in internal and external publications.

Prior to his role in executive compensation, Aditya has

worked as a Senior compensation consultant supporting

financial institutions. In this profile, he has worked on

projects across job evaluation, sales incentive plans,

rewards philosophy, pay range design, pay for

performance studies and productivity studies. He had also

worked on end to end HR and rewards set up for a new

bank.

A production engineer from College of Engineering, Pune,

Aditya holds a PGDM (PMIR) from XLRI, Jamshedpur.

Aditya started off his consulting career with KPMG as a

part of their HR consulting team. At KPMG, he worked with

State Governments, Power Utilities & Maharatnas on HR

transformation, Skills Development and Leadership

Development.

Aditya Nanavaty

Senior Consultant,

Executive

Compensation and

Governance

Aditya's Mantra

The best way to predict

the future is to create it

Peter Drucker

Connect with us

aonahlc@aon.com

011 39585050 Course Fee (inclusive of taxes)

₹65,000Participation will be confirmed post payment

Learning Center

Classroom sessions

16 hours

Online

Discussion Board

Active for one year

Participant

Handbook

Pre-reads

10 hours

Certification

Certified

LTI Expert

Course Calendar

Click to view

Terms & Conditions

Click to view

Aon AHLC Inquiry Mailbox

aonahlc@aon.com

011 39585050

Vishisht Dhawan

Vishisht.Dhawan@aon.com

919819488433