A deferred share bonus plan is a type of long-term incentive plan (LTIP), typically put in place by quoted companies or those in certain sectors (such as the financial services sector). A deferred share bonus plan is a hybrid plan that combines awards payable or potentially payable under an annual bonus plan with an LTIP. With the emphasis moving away from short-term cash-based reward arrangements towards longer-term share-based plans, deferred share bonus plans are now very widely used, especially for those companies with institutional shareholders. There are no statutory requirements for these plans.
Deferred share bonus plans are typically constituted by the following key elements:
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