STI vs LTI: what they mean (and how to estimate them)

STI (Short‑Term Incentive) is usually a bonus paid within a year (quarterly or annual). LTI (Long‑Term Incentive) is a multi‑year reward (often equity, performance shares, or cash plans tied to 2–4 year goals).

Quick definitions

• STI: annual/quarterly bonus tied to KPI/OKR performance, company results, and sometimes manager rating.
• LTI: value delivered over time (vesting) tied to longer‑term outcomes (growth, profitability, TSR, retention).

When companies use each

• STI is common for broad employee groups (sales, ops, corporate roles).
• LTI is common for leadership and key roles where retention matters.
• Some plans combine both: STI drives this year’s execution, LTI drives multi‑year outcomes.

STI: a simple formula you can model

A common pattern is:

STI payout = Base salary × Target bonus % × Performance rating × Company factor × Proration

If you don’t know the company factor, test 0.8, 1.0, 1.2 to see a range.

Worked STI example

• Base salary: $80,000
• Target bonus: 10%
• Rating: 1.1×
• Company factor: 0.95×

STI = 80,000 × 0.10 × 1.1 × 0.95 = $8,360

LTI: how to think about it

LTI is often quoted as a grant value (e.g., $30k in RSUs) but paid over time (vesting). For planning, the useful number is the expected value per year:

Annualised LTI ≈ Grant value ÷ Vesting years

Worked LTI example (simple)

• Grant value: $30,000
• Vesting: 3 years

Annualised LTI ≈ 30,000 ÷ 3 = $10,000 per year

Why “LTIP calculator” pages often don’t index

Many sites create multiple near‑duplicate “LTIP calculator” pages (yearly, quarterly, percentage, STI, LTI). Google usually indexes one and ignores the rest. The better play is one strong calculator page + guides like this one that build authority.

Last updated: 2026-03-01