Which of the following best describes a Long-Term Incentive Plan (LTIP)?

The description that states a Long-Term Incentive Plan (LTIP) is a plan that rewards employees over a period longer than one year is accurate. LTIPs are designed to incentivize employees to contribute to the organization's long-term success by tying rewards to the performance of the company over multiple years.

These plans often utilize various forms of compensation, such as stock options, restricted stock grants, or performance shares, which typically vest or are payable based on the achievement of specific performance goals over a designated time frame, usually spanning three to five years. This approach aligns the interests of employees with those of shareholders, motivating them to focus on the long-term health and growth of the company rather than short-term gains.

In contrast, other options refer to compensation plans with much shorter time frames or different focuses, which do not fit the critical characteristics of an LTIP. Therefore, the option indicating a timeframe longer than a year correctly encapsulates the essence of LTIPs, emphasizing their role in promoting sustained company performance and rewarding employees for their contributions towards achieving long-term company goals.