A survey of 224 organizations found that 38% are reviewing aspects of their long-term incentive (LTI) programs, as nearly 85% of a CEO's pay comes from LTI. The top areas under review include vehicle use, eligibility levels, performance measures, and payout opportunities. Performance-based plans are most commonly used for CEOs and direct reports, while time-based plans are used more often for lower-level executives. Most companies use the same LTI guidelines globally. Company performance is the most common driver of LTI levels, though board discretion and economic conditions also influence levels.

1. Risk. Reinsurance. Human Resources.
Aon Hewitt
Talent, Rewards & Performance
In spring 2016, Aon Hewitt conducted its annual Hot Topics in Executive
Compensation survey of 224 organizations to find out what concerns they have
about long-term incentives. Nearly 85% of a CEO’s total pay can come from
long-term incentives, so it’s no surprise that 38% of respondents are reviewing
aspects of their LTI programs. This report highlights the top plan design
elements under review as well as some LTI plan features in use today.
2016 Trends in
Long-Term Incentives
Talent, Rewards & Performance
2016 Trends in
Eligibility Levels
Payout Opportunities
Vehicle use
Performance Measures
Performance Leverage
Top Areas of Review
*Statistics may exceed 100% due to multiple
responses.
Area Actions Considered
Vehicle Use
92% to deliver more value through
performance-based vehicles as
opposed to pure time-based vehicles
Eligibility
Levels
56% to limit eligibility, while 44% may
look to expand it
Performance
Measures
65% may expand the number of
performance measures used, while
25% may look to decrease the current
number used
Payout
Opportunities
55% may increase target award
opportunities.
30% may increase maximum
award opportunities.
Performance
Leverage
Factors
64% may review minimum performance
levels used to trigger minimum payout
opportunities.
46% may review maximum performance
levels used to trigger maximum payout
opportunities.
33%
32%
26%
14%
0% 10% 20% 30% 40%
26%

2. 2016 Trends in Long-Term Incentives 2
LTI Vehicle Usage
Performance-based plans are the most frequently used vehicle to deliver long-term incentives at the
CEO level and their direct reports. Time-based restricted shares come into play more often for Level 3
executives. Higher-level jobs have greater ability to affect the performance measure.
Our survey found that 67% of companies currently grant long-term incentives globally. Most use the same
guidelines for executives, no matter where they are located.
84%
of surveyed
organizations
indicated that they
grant CEOs and
their direct reports
performance-based
shares.
74%
of the companies
surveyed use a
uniform policy for
granting long-term
incentives globally.
30%
15%
33%
45%
External Market Data Specific % of salary,
based on level / title
/ grade
Specific dollar value,
based on level / title
/ grade
Fixed number of
shares, based on
level / title / grade
Global
Globally Differentiated Policy
Globally Uniform Policy
Policy is globally uniform for
executives at higher organization
levels,and globally differentiated
for other executives
74%
0%
Factors in Grant Determination
Determining the size of an overall annual long-term incentive award varies by executive level.
Global Grant Guideline Policy Prevalence
19%
7%
50% 100%
31%
CEO Level 2 Level 3
26%
30%
32%
35%
7%
8%
8%

3. 2016 Trends in Long-Term Incentives 3
Drivers of Long-Term Incentive Levels
A number of factors can impact the value delivered through long-term incentives. Company
performance is typically the most common, but other elements, such as board discretion and
economic conditions also play a role.
Drivers of LTI Levels
CEO Level 2 Level 3
Board Discretion
Company Performance
Relative to Plan Goals
31%
17%
36%
34%
35%
31%
25%
45%
23%
Economic Conditions
Change in Stock
Price over past year
21%
21%
23%
Pressure to Compete 15%
12%
12%
Share Availability 11%
10%
10%
Management Discretion 19%
27%
10%
Shareholder Concerns 5%
2%
5%
25%
Are you among the 38% who are reviewing LTI programs? Check out our Total Compensation Measurement® (TCM)
survey data to benchmark all elements of pay. Contact us for more information.

4. About Aon
Aon plc (NYSE:AON) is a leading global provider of risk management,
insurance brokerage and reinsurance brokerage, and human resources
solutions and outsourcing services. Through its more than 72,000
colleagues worldwide, Aon unites to empower results for clients in
over 120 countries via innovative risk and people solutions. For further
information on our capabilities and to learn how we empower results
for clients, please visit: http://aon.mediaroom.com.
© Aon plc 2016. All rights reserved.
The information contained herein and the statements expressed are of a general nature and
are not intended to address the circumstances of any particular individual or entity. Although
we endeavor to provide accurate and timely information and use sources we consider reliable,
there can be no guarantee that such information is accurate as of the date it is received or that
it will continue to be accurate in the future. No one should act on such information without
appropriate professional advice after a thorough examination of the particular situation.
This report was created using data from the 2016 Aon
Hewitt Hot Topics in Executive Compensation Survey.
For more information about Executive Compensation
surveys, data solutions, and consulting services,
please contact surveysupport@aonhewitt.com.