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Bonus Benchmarks

Bonus BenchmarksIn general, 1) What is the bonus % payout per employee and per executive (will most likely differ) compared to his/her regular pay on an annual basis? 2) What is the Payroll Expense % of the Total G&A Expense? 3) For small companies (nearing $50m/yr in sales), what is the CEO's compensation amount? Also, do you have any resources you can refer to related to any of the questions above and/or about bonus/ compensation programs? Thanks!


(Director of Global Accounting) |

1) Unanswerable, for the most part. I've seen exec bonuses in the 30% range, down to nothing (especially if they own stock). It depends highly on whether you can reasonably carve out part of their target pay for something that is measurable and within their control (profit sharing is a good alternative structure where it is less in an individual's direct control, so is more of an extra than it is variable comp). For lower level employees, 5% or so is more common for a variety of reasons.
2) Usually very, very high unless you outsource, are going through legal trouble, etc.
3) CEO pay is directly related to revenue. I know the Darden team at UVA did a recent study on that function, so you can get their data and just do the math. Alternatively, there are plenty of salary surveys out there that you can buy or get from your HRIS vendor.

Topic Expert
Mike Caruana
Title: Director of Financial Services
Company: Diamond Resorts International
(Director of Financial Services, Diamond Resorts International) |

I'm assuming your question is primarily around annual (vs monthly or quarterly) bonuses and such.

An additional comment regarding the answer to point #1, I've seen a sliding scale used whereby lower level (supervisory) staff are in the 3-5% range, managers are in the 5-10% range, directors 10-15%... These can be combined with other quarterly performance based incentives that are measurable and significant to the company's success (e.g. certain expense targets, team member development initiatives, etc.)


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