The smaller bonuses will likely be from slower economic growth, higher inflation and pressure from investors to use more meticulous performance targets, compensation advisers told the Journal.
Last year companies set lower performance targets because of the pandemic and greatly outperformed, creating higher annual bonuses. Two years into the pandemic, companies are able to better predict their performance targets, according to the article.
In 2021, there was a 42 percent increase year over year in median bonuses for CFOs at companies in the S&P 500, to more than $1 million, advisory firm Mercer found. There was a 17 percent increase in total median compensation, to $4.5 million.
For CEOs, median cash bonuses increased 35 percent in 2021, to $2.9 million, compared to 2020. Total median compensation rose 13 percent, to $14.1 million.
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