Hello Agni
First thing to do is to ensure that the client clearly understands the final effect that they want to obtain because LTIs and retention plans potentially aim to achieve very different things.
An LTI principally seeks to reward someone for producing long term business results, and the level of the final reward will essentially depend on the level/quality of the results. It has the potential of having a retention effect, but that is not the main purpose.
A retention plan aims principally to ensure that specific actors remain in place until certain milestones have been achieved, and usually has a guaranteed payment level so as to provide a clear incentive to stay. Retention plans that are results driven, will have no effect if part way through the timeframe the person can see that no payout will happen.
Once you have got these two points clearly in mind, it will then be possible to focus on the chosen tool and its appropriate callibration.
For LTI - what is good medium-term or long-term performance and what indicators can be used to measure it? Will the LTI be a regular thing or a one-off event, and why?
For retention plans - what is the time/event horizon, and what level of payout will be needed to achieve the retention effect? Do you include a clawbak if the person takes the payout and leaves withinn, say 2 years, of the event?
Massive subject, but these are the cornerstones of the beginning of any useful analysis.

In reply to Ray:

Thanks, Keith! The majority of what you've described has already been answered internally (sorry for not mentioning those) and we're looking into 2 programmes: LTI to get the senior leadership team vested in the company and driving it forward and a retention scheme ensuring they stay for at least the initial start up period (retention scheme for 2 years).

I'm looking now for Pakistan-specific tips from a cultural and economic perspective. For example, how are LTI and retention schemes perceived by senior leadership? Were there certain surprises when implementing such a scheme in Pakistan previously? Would you have any insights into the country?

Many thanks,
Agni

In reply to Agni:

No direct experience in recent years, however I discussed your question with some colleagues in one of my french networks at a dinner last night. Lucky timing!
Cultural comments centred on a strong focus on "cash now" as opposed to a promise for the future. Other comments included the fact that the recent legalisation by PSX (Pakistan stock Exchange) of "calls" and "puts", the culture could change - at least for senior managers with economic savvy .
Feelings expressed were that cash products would be more favorably received in today's clutural climate than performance shares or stock options - easier to understand, and future value not subject to FX movements associated with the foregn currency value of shares of a foreign mother company.
Another comment was that any successful retention plan would require regular payouts, rather than being totally "back-loaded". Periods mentioned were at least every 9 months - longer was considered culturally "too far in the future" to be attractive
Hope this helps
Ray

In reply to Ray:

This is a fabulous Christmas present, Ray!

Thanks a lot for your network and insights,
Agni