LTIP Long-Term Incentive Vesting 2027 Calculator
Calculate LTIP (Long-Term Incentive Plan) vesting 2027 — performance shares vesting 3-5 years on company TSR vs index. Critical at exec level.
LTIP Defined
Long-term incentive plan. Vests 3-5 years based on company performance. Common metrics: Total Shareholder Return (TSR), Relative TSR vs index, ROE, EBITDA growth.
Performance Multiplier
Below threshold (often -25% to 0%): payout = 0. Threshold to target: 50-75%. At target: 100%. Above target: 150-200%. Capped to limit dilution.
Forfeiture Risk
If you leave before vest, forfeit ALL. Unlike RSU (proration in some cases), LTIP almost always all-or-nothing for performance shares.
Tax at Vest
Ordinary income at vest (FMV of payout). Same as RSU. Employer typically withholds 22% federal default. Often inadequate at higher brackets.
Source: shrm.org LTIP design surveys, mercer.com executive comp. Last updated: May 2026.
Frequently Asked Questions
Can I diversify out of LTIP?
Not until vest. After vest = ordinary RSU. Sell at vest to diversify (employer stock concentration risk).
Negotiable at hire?
Yes. Major lever for VP+ hires. Negotiate target multiplier, threshold definitions, change-of-control protection.
Acceleration on acquisition?
Common (60%+ of plans). 'Double trigger': acquisition + termination within 12 months = full vest. Read plan document carefully.