Long-term incentive (LTI) plans have evolved dramatically since 1995, shifting from simple stock options focused on financial metrics like EPS to sophisticated, strategy-driven programs incorporating ESG goals, human capital metrics, and customized award structures. This transformation has been driven by regulatory changes, new technology, evolving workforce expectations, and a broader push for stakeholder alignment, with tools now enabling real-time tracking, personalization, and advanced analytics. Despite these innovations, fundamental human factors—like the desire for recognition, fairness, and ownership—remain central to LTI effectiveness and will continue shaping future designs into 2035 and beyond.

Amid economic uncertainty in 2025, middle-market companies are reevaluating executive compensation strategies to prioritize cash preservation, long-term value creation, and adaptability, shifting away from all-cash bonuses toward deferred compensation and equity-based incentives. Key trends include revising performance metrics, implementing multi-year retention plans, enhancing downside protection, and aligning incentive plans with resilience-focused goals such as margin protection and supply chain agility. Legal considerations emphasize compliance with tax codes, clear documentation, governance improvements, and transparent communication to manage retention risk and support business continuity.

A survey by Christian and Timbers revealed that compensation for C-suite executives in private equity-backed tech companies rose by 2.1%, driven by increased equity stakes outpacing cash compensation growth. CEO and CFO salaries and bonuses vary significantly by company size, with larger firms offering higher pay and equity incentives, particularly for companies nearing exits. The report also highlighted trends such as a shift toward internal recruiting, low gender representation in C-suite roles (with women holding only 21.6% of positions), and the growing emphasis on long-term leadership investment through equity.

The 2023–24 CEO & Senior Executive Compensation Report for Private Companies reveals that CEO base salaries saw modest growth of 4.1% in 2023, with similar trends expected in 2024, while bonuses increased significantly, contributing to a nearly 10% rise in total cash compensation. Senior executives experienced smaller salary increases, averaging 3.5%, but benefited from a 30% rise in performance-based incentives in 2023, with median total compensation reaching $239,000 excluding presidents. Middle managers and front-line workers saw the largest salary increases of 4.2% in 2023, driven by talent competition, though 2024 pay raises across all levels are projected to remain modest, influenced by factors like company size, growth, and profitability.

The Investment Association (IA) has released updated remuneration principles, offering greater flexibility for UK-listed companies to structure executive pay in ways that attract and retain top talent in a competitive global market. Key changes include relaxed dilution limits, with the 5% restriction on discretionary share plans removed, and allowances for evergreen employee share plans that no longer require shareholder approval every 10 years. While these updates provide companies with more discretion, they must still align with existing shareholder-approved remuneration policies and plan rules, ensuring compliance while leveraging the new flexibility to meet strategic objectives.

Boku Inc. will hold an Extraordinary General Meeting (EGM) on 11 September 2024 to seek shareholder approval for a new executive share scheme. The New Plan, designed to reward exceptional performance and align executive incentives with company growth, will allocate up to 9,090,858 restricted share units, representing 3% of the company's issued share capital. Awards will vest based on a performance condition tied to share price growth over the next few years, with further details available in the Notice of EGM.

The Delaware Court of Chancery recently invalidated Elon Musk's equity compensation plan with Tesla, which was criticized for being excessively large compared to peer plans and lacking proper negotiation. The court found that Musk effectively controlled Tesla in the context of the award, and that the approval process was flawed, including misleading proxy statements and insufficient benchmarking. As a result, the court determined the award was unfair and ordered it rescinded.

Microsoft has taken a proactive step in addressing cybersecurity concerns by linking executive compensation to the company’s security performance, following recent high-profile attacks. The initiative, known as the Secure Future Initiative (SFI), aims to prioritize security and hold leaders accountable for meeting security plans and milestones. This strategic move reflects Microsoft's commitment to enhancing cybersecurity and fostering a culture of continuous improvement, as highlighted by Executive Vice President Charlie Bell and Chief Information Security Officer Igor Tsyganskiy.

Boeing's CEO Dave Calhoun and former Executive Vice President Stan Deal, despite announcing their departures amid scrutiny over manufacturing flaws, stand to collect a combined $45 million in compensation. They won't likely face internal clawback policies since they weren't fired due to quality management issues. However, shareholders are expected to approve a proposal tying executive compensation to safety improvements, as Boeing faces intense scrutiny following incidents like a door panel detaching from a 737 Max 9 jet. The company's compensation structure is being retooled, and leadership changes are expected to address concerns and improve performance.

In January 2024, a Delaware Court rescinded Tesla's 2018 option grant to Elon Musk, valued at $56 billion, due to breaches of fiduciary duty in awarding the grant. Now, Tesla seeks shareholder ratification of the grant to reinstate it, addressing disclosure deficiencies and procedural issues highlighted by the court. However, the legal strategy faces uncertainty, with potential challenges and implications for shareholder approval under Delaware law.