What is long-term incentive plan in SAP PA-CM - Compensation Management?

SAP Term: long-term incentive plan

• Component: PA-CM

• Component Name: Compensation Management

• Description: A set of rules that describes how compensation as long-term incentives LTI, for example, stock options, should be granted and handled.

Smart SAP Assistant

• Key Concepts: 
  Long-term incentive plans (LTIPs) are a type of compensation plan offered by employers to reward employees for their long-term commitment and performance. LTIPs are typically offered in the form of stock options, restricted stock, or performance shares. These plans are designed to motivate employees to stay with the company for a longer period of time and to increase their performance. 
  
  How to use it: 
  The PA-CM Compensation Management component of SAP allows employers to create and manage long-term incentive plans. This component provides employers with the ability to set up and manage LTIPs, including setting eligibility criteria, defining vesting schedules, and tracking performance metrics. It also allows employers to track the progress of their LTIPs and make adjustments as needed. 
  
  Tips & Tricks: 
  When setting up an LTIP, it is important to consider the goals of the plan and how it will be structured. Employers should also consider how they will measure performance and how they will reward employees for meeting or exceeding expectations. Additionally, employers should ensure that their LTIPs are compliant with applicable laws and regulations. 
  
  Related Information: 
  For more information on long-term incentive plans, please refer to the SAP Help Portal or contact your local SAP representative. Additionally, there are a number of resources available online that provide guidance on setting up and managing LTIPs.