Many firms reward company executives by granting shares, or share equivalents, which vest after several years. Long Term Incentives (“LTI’s”) now increasingly account for a significant proportion of total compensation and are primarily used to align employees’ interests with those of the shareholders.

LTI’s form a core element of Financial Services firms total reward strategy and are referred to in The Financial Services Authority (“FSA”) Remuneration Code.
The revised Code, which came into effect from 1st January 2011, requires certain employees to be designated “Code Staff”. The key impact for these employees is that there are mandatory deferrals of variable remuneration subject to further conditions.

It is therefore essential to carefully evaluate any LTI awards when calculating loss of earnings for litigation purposes.