Buck: Cash-Based Incentives on the Rise

A survey released by Buck Consultants found a significant increase across the globe in the use of cash-based long-term incentives (LTI) as part of employee compensation programs. Since 2012, cash LTI awards increased from nine percent to 18 percent in Canada, six percent to 18 percent in the UK, seven percent to 18 percent in France, and 10 percent to 14 percent in the U.S. Buck Consultants' annual Global Long-Term Incentive Practices Survey confirmed that companies are substituting cash LTI for equity-based awards where it is appropriate. Additionally, the use of cash LTI awards increased in the U.S. at all employee levels (except CEO) and more than doubled over the past two years for vice presidents (VP), directors, and managers. "Companies are taking a hard look at the use of equity-based incentives and determining that, in some cases, cash may be the more effective motivator," said Sandra Sussman, a director in Buck Consultants' compensation practice. Results indicate full-value awards remain the most prevalent vehicle, with the most value being delivered in the form of time-based restricted stock/units. Buck's survey examined the global long-term incentive compensation practices of more than 130 participating companies in 40 countries.