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James from Cow Kind explains the concept of long-term incentive plans (LTIP). LTIPs are rewards given to employees who meet goals that increase shareholder wealth. These plans have specific requirements and conditions, with different types of LTIPs available. Employees receive capped options and stock rewards through LTIPs, which are designed to promote long-term organizational growth. The policy is a function of the organization and aligns with the company's growth plan, allowing employees to identify areas for improvement.