Company Performance-Driven Bonus

Have you ever worked for a company with a target bonus that didn’t pay out? I got to thinking that I’ve never received a significant reduction to my annual bonus, even during rough financial times. My guess would be that failure to pay these bonuses would cause a lot of key people to start looking for new jobs.

I worked for a company where the performance-driven bonus was a pretty complex calculation based on individual performance, company performance, division performance, and department performance with the caveat that if the company didn’t meet a minimum earnings target there would be no bonuses.

So one year we didn’t meet the minimum earnings target. But they decided that everyone worked so hard that we’d all get a flat $300 bonus anyway as long as we weren’t in the bottom individual performance category.

Turns out that $300 was actually MORE than some low earners in the second-to-bottom performance category would have been entitled to under the regular plan. But for most of us it was a big cut in our bonus.

Executives and certain claim analysts were on a different bonus plan that wasn’t contingent on meeting certain minimum profit targets. They didn’t want executives cooking the books or claim analysts denying large but legit claims in order to get the bonus.

My company has definitely seen swings from 0 to 125% of bonus from company performance, though as the reserving and appointed actuary, my particular bonus calculation always uses a 100% for the company performance so my compensation is independent of the reserve level.

Yes. I’ve seen 0% at my old companies (not during my time, but looking at company record just a couple years prior)

2008-2011 had a lot of 0%s

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Yes. One year they didn’t pay out anything. Virtually every year they paid less than they targeted. The Company Targets were too unrealistic. At one point it was a 21% ROE target, when the company had never had above a 15%.

That would have made a lot more sense for the claim analysts and executives at my old company too. But not how they actually did it.

My employer also relies on a formula that takes profitability into account. I’ve never seen the bonus pool drop to zero (even when the formula would take it there) but I’ve seen it drop well below target levels.

Same. Although the company I worked for before switching careers actually paid out nothing the spring after I left. Not only did they not met the sales growth targets, when I left (essentially 9/1) sales were down >15% year over year.

Felt bad for a few people, but F that place.

0% in 2008. This year’s won’t be great, but should be more than nothing. Maybe 25% of target?

Never 0%, it has ranged from 60% of my Salary to 8% of my salary

I left one job after the pool was set, but before the actual payout ( I negotiated this with the new job), but felt bad that had I been able to give notice before the pool was set, my coworkers could have gotten a bit more

For a while, the running joke was that when I showed up at a place, it quit paying its target bonus. I literally went 7 years where my employer didn’t hit target after supposedly always hitting target. Now, it’s when I leave a company it quits paying its target bonus; the last 2 places, they’ve failed to hit target after I left.

When companies missed target, there was “missed target, but still cleared minimum” and “didn’t hit minimum.” In the latter, the company still paid out something 2 of 3 times to show employees yeah, we recognize you put in hard work, you shouldn’t get nothing for that. (The 3rd time, the company paid a bonus to one segment of the company because it purportedly hit target and everyone else got nothing. That went over well.) Employees will stick around when they get something; when they get nothing, they’ll bail out.

Yes. It was mostly the lean years of 2008-2011. However, two years ago my division was paid out only 60% of bonus. The primary reason given was that our employee survey results were unfavorable :neutral_face: There was a significant uptick in the employee survey results last year. Management’s response was, “You like us! You really like us!” I’m positive the results were totally unbiased.

The employees gave negative feedback to management, so management cut their bonus?? That’s crazy.

The beatings will continue until morale improves!


When I left my last true actuarial job (group pricing) they paid out a substantial bonus every May. I struggled in March to decide if I should stay and get the bonus, or quit in March. I quit in March. Worth it.

Yes. Well, technically we didn’t have formal targets, but there was a widely understood “on average people at this company get x% - y% bonuses” and they were paying our department very close to 0, with high performers getting more but still well below anything that would be typical.

After the first time I was pulled into an hours-long meeting about unfavorable survey results (about 20 years ago), I never wavered from the 5-spot (out of 5) again.

Nice humblebrag about being a key person