Median performance spread in executive incentive plans is 35% – Willis Towers Watson

The median performance spread in annual incentive plans is 35%, according to a survey of global executive incentive design by Willis Towers Watson. The median bonus payout amongst the 700-plus companies in the survey is 150% for all financial measures, with a 50% payout at the threshold level and 200% at the maximum level of performance.

However, as the firm points out:

‘In designing short- and long-term incentive programmes, each company needs to consider its specific business context, organisational culture and talent strategy, among other variables.’

The survey finds that performance-based long-term incentives are the most common long-term incentive vehicle in North America and EMEA countries, compared with Latin America and Asia Pacific, where companies tend to rely more heavily on stock options and full-value shares for executive incentives.

The ‘Willis Towers Watson Global Executive Incentive Design Survey’ results provide insights into these and other incentive design issues. Launched last year and remaining open for participation, the survey has collected data from more than 700 companies operating in 30 countries to offer participants an ‘unparalleled depth and breadth of data covering the design, ongoing management and cost of total incentive programmes’.

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