The Advisors' Blog

Compensation Advisory Partners recently reviewed annual & long-term incentive program designs at 52 tech companies – grouped by revenue size into “small,” “medium,” and “large” categories. Here are the key findings:

Annual Incentive Plans

– Revenue and profitability are the most common metrics
– Complexity of plans (i.e., number of metrics and use of non-financial measures, etc.) increases as company size increases

Long-Term Incentive Plans

– Use of performance plans is nearly universal among CAP’s sample
– TSR is the most prevalent metric among larger companies; smaller companies focus on growth measures such as ARR balanced with profit-based metrics
– Emphasis on performance-based equity grows as companies get further from IPO and grow in size

See the full memo for details on the number of metrics used, prevalence of specific metrics by revenue size, how companies are applying individual performance factors, and more.

– Liz Dunshee