These days almost everyone’s bonus pay is based on his or her actual performance — including those in the C-suite.
According to the recent study by Pearl Meyer & Partners titled Compensation Planning: Looking Ahead to Executive Pay Practices in 2011, 41% of companies are increasing their bonus performance requirements in 2011. That’s up from the 26% of firms who did so in 2011.
And companies are holding all employees to these targets. For example, in 2010 just 18% of companies payed out a bonus when performance targets weren’t met, compared to the 24% of firms that did so in 2009.
Executive raises will be moderate in 2011, as well. Here are the salary increases companies are planning for execs next year:
- a 2% to 4% boost (55%), and
- greater than a 5% increase (5%).