Equity compensation is a hot topic in continental Europe in 2003. The majority of multinational companies are reviewing their current long-term incentive (LTI) plans in light of concerns about the downturn in the stock market, changing accounting laws, media scrutiny, more stringent disclosure requirements and increased focus on corporate governance. This paper examines the impact of these key factors on the LTI plan design and describes emerging trends such as the declining popularity of stock option plans, the increasing use of performance criteria and alignment with international best practices.