Does anyone know how the LTI works? This is in addition to target your target bonus right? I know I am eligible this year but have no idea what to expect. I’ve heard rumors of past LTIs being restricted stock options and then I’ve also heard it is cash that is paid as the same time as your target bonus but not sure what to believe or expect.
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Ask your manager. You really need to be comfortable discussing your compensation with your manager, not going to an anonymous message board for information. The design may be different for your job than other jobs.
I don't know what's s
Worse. That you make enough to qualify for LTI and not know what it is or that you make that much and you chose to ask this forum on how you get paid.
“ It’s typically only handed out to the top performers and top management.”
Two very different groups in terms of performance. Another type of diversity?
It’s restricted stock; mine has lost nearly half its value..
Vests over three years not four. I get LTI each year, so I know of what I speak.
OP, whoever you heard from that it's cash paid at the same time of your bonus doesn't know what LTI is - "Long Term Incentive". It's deferred compensation, meant to create retention incentive, and tie your incentive to the company's performance. You aren't technically granted stock (as someone else in the thread has said) you are granted "restricted stock" which means you are granted the RSU at the price of the stock as of the day of the grant, but you don't own it until it vests. The vesting is spread out over 4 years. Each year a tranche becomes yours, and it is income that you owe taxes on for the year it vests. If you leave voluntarily before vesting, you forfeit all unvested stock. If you are displaced, it all vests upon termination.
Eligibility for LTI has to do with job family/classification - some roles are eligible and some are not. At different levels there are differing "participation rates" (percentage of people in that job code who get LTI) Participation rates go up the more senior the job level.
In terms of what to expect this year, LTI is an expense just like salaries and bonuses. As the bonus pool has been funded less and less the last three years, the LTI pool funding has also retracted. So if you've never gotten it before, even if your eligiblity changed this year due to promotion into a different job code... chances are slim unless you are a top performer and a key person for retention.
LTI is when you're issued some amount of WF stock. So if you get 10k worth of stock, you'd get 392 shares as of Friday's stock price. A year later, 25% of the stock will become available to you to sell or hang on to. When the stocks are made available to you they sell enough shares automatically to cover taxes and whatever shares are remaining are yours to do with what you like. Every year for 4 years you'll get 25% of the issued shares.
It’s separate from your bonus. While there are different programs, in general, it is restricted share stock. You get a grant and it vests over the following 4 years. So you don’t get anything initially, but the following year you get a grant, and that is repeated for 3 more years till the grant is completed. You earn dividends on the stock as it sits there waiting for you.
Just because you’re eligible doesn’t mean you’ll get it. It’s typically only handed out to the top performers and top management.