Planning LTI Grants Using Currency Amounts? You Can Still Use Standard ECM iViews

  • by Basant Maheshwary, Principal, MGI Group, Inc.
  • June 1, 2010
Find out how to use standard Enterprise Compensation Management iViews, without customization, to plan and approve long-term incentive grants using currency amounts instead of stock option units. You can subsequently convert the approved currency amounts into appropriate stock units using a defined formula.
Key Concept
The recent backlash against compensation using stock options and other long-term incentive (LTI) grant vehicles has steered more companies toward planning and approving LTI grants using currency amounts instead of stock units. By planning the grants using currency amounts, companies can effectively control the final cost to the company resulting from the LTI grants. This approach allows managers to have clear visibility into the financial effect of the LTI grants made to employees and can thus afford them greater flexibility in allocating changes appropriately across all compensation plans (such as merit and bonus) for their employees.

Companies are increasingly choosing to plan long-term incentive (LTI) grants using currency amounts instead of stock units. However, standard Enterprise Compensation Management (ECM) iViews only allow for LTI grants to be planned as stock units. This limitation should not be viewed as a significant functionality gap requiring iView customization. By using an innovative configuration approach and a Business Add-In (BAdI) enhancement, you can still use the standard ECM iViews to plan LTI grants as currency amounts. You can then convert the approved currency amounts into stock units. Using an SAP-delivered BAdI instead of iView customization makes the solution easier to implement and maintain going forward.

Basant Maheshwary

Basant Maheshwary is a principal and co-founder of MGI Group. He has been consulting in the SAP ERP HCM space since 1997 and has extensive experience in implementing SAP HCM solutions. Over the last few years, he has built a strong focus and expertise in the implementation and rollout of Enterprise Compensation Management and Performance Management solutions for large global organizations.

See more by this author


No comments have been submitted on this article. 

Please log in to post a comment.

To learn more about subscription access to premium content, click here.