Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Long-term definition

What does Long-term mean? Long-term describes obligations, assets or investments extending beyond the short‑term horizon; the precise threshold depends on context and governing standards used in legal practice and finance. In the Eurobond market, it commonly refers to securities with an initial maturity of more than seven years. Under accounting standards (IFRS and UK/Irish GAAP), amounts due or receivable after more than twelve months are presented as non‑current; accordingly, long‑term debt denotes borrowings with a remaining maturity of over one year. This classification affects balance sheet presentation, disclosure and covenant calculations. In loan, security and capital markets documentation across England & Wales, Scotland, Northern...

UK long-term incentive plans: structures, performance and holding conditions, IA Principles, hybrid schemes, US/UK distinctions, EBT operation, and FCA Listing Rules and directors’ remuneration report definitions

Published by a LexisNexis Share Incentives expert

Practice notes

A long-term incentive plan (LTIP)

An LTIP is widely used by listed companies to denote executive share arrangements where senior employees receive share-based awards that vest after at least three years. To meet institutional shareholder voting requirements where approval is needed, such awards are generally conditional on achieving stated performance targets.

With particularly rigorous performance conditions, an LTIP is often labelled a performance share plan (PSP).
In the past, where a particular style of LTIP award was used, some companies called it a restricted share plan.

For companies listed in the equity shares (commercial companies) category of the London Stock Exchange, the Financial Conduct Authority (FCA) handbook provides a specific definition of long-term incentive scheme. See Specific definitions below.

The term LTIP is also employed more broadly to describe any incentive arrangement lasting more than one year, including cash bonus schemes. That broader usage should not be confused with the more generic use of LTIP to describe share incentive arrangements typically aimed at senior executives...

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Jeremy Edwards

Baker McKenzie

Jeremy has 18 years' experience as an employee benefits lawyer and 2 years experience as a corporate lawyer. Jeremy advises on all aspects of employee share plans, executive compensation and the taxation of employees. Jeremy has substantial UK experience, including implementing plans for UK listed companies, advising on UK tax issues and dealing with share plans in the context of corporate transactions. Jeremy also has extensive experience in connection with the implementation of share plans globally and working with multinational clients....

Web page updated on 21/05/2026

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