No Obligation To Pay Long Term Incentive Bonus Upon Termination

The Alberta Court of Appeal clarified the law with respect to how long-term incentive plans should be treated when an employee is terminated. In the recent decision of Styles v. Alberta Investment Management Corporations, 2017 ABCA 1, the Court of Appeal overturned a trial level decision that greatly expanded the entitlement of employees to long term incentive bonus payments upon termination.

Background

Styles was employed as an investment manager with Alberta Investment Management Corporations (the "Company"). His employment was governed by a written employment contract which provided for a base salary plus potential bonuses. The potential bonuses were governed by the Annual Incentive Plan and the Long Term Incentive Plan ("LTIP"). The Plans were set out in detailed documents which were incorporated into the employment contract.