Volatility Keeping CEO Bonus Pay At Multi-Year Lows, New Report Finds
Summary
Just-released Chief Executive Research finds CEO bonus pay at private US companies has dropped to multi-year lows. The median CEO bonus payout for 2025 is forecast at 25% of base salary — down from 33% in 2021 and below pre-pandemic norms of roughly 28–30%. Median bonus expectations have fallen from $100,000 (2021–24) to $80,000 in 2025. Base salaries have edged up but lag inflation, and actual payouts as a share of target have declined after a 2021 spike.
The report links prolonged economic, geopolitical and other volatility to difficulties in setting realistic performance goals, which keeps bonus targets and payouts subdued. Company size matters: smaller firms tend to pay lower bonus percentages, while firms with $1bn+ in revenue commonly target bonuses above 60% of base. Half of firms expect to raise bonus targets for 2026, but uncertainty remains.
Key Points
- Median CEO bonus payout for 2025 forecast at 25% of base salary (down from 33% in 2021).
- Median bonus expectation declined from $100,000 to $80,000 in 2025.
- Base salaries have risen but lag inflation, reducing bonus as a share of total compensation.
- Actual bonus payouts fell back toward pre-pandemic levels after a 2021 outlier year when payouts hit 100% of target.
- 50% of companies plan to increase CEO bonus targets for 2026; 41% plan to hold levels steady.
- Company size correlates with bonus levels: under $100m revenue median bonus <40% of base; $1bn+ revenue median bonus >60%.
- Prolonged volatility makes goal-setting harder, influencing incentive design and potential retention risks.
Why should I read this?
Short and blunt: if you set pay, sit on a board, advise executives or hire senior leaders, this matters. Bonuses are being squeezed by ongoing volatility and shifting pay mixes — this summary saves you time and flags what to watch for in 2026 planning so you don’t get caught off-guard.
Context and Relevance
The report is important because executive compensation signals how organisations balance risk and reward. With variable pay under pressure and targets harder to pin down, boards and HR leaders will need to rethink incentive structures, retention packages and succession plans. The data-led breakdowns by company size and the 2026 outlook offer practical benchmarking for compensation strategy and budgeting.
Author style
Punchy: the piece cuts to the chase with clear numbers and a pragmatic take — read the detail if you influence or approve executive pay. It’s useful for short-term budgeting and longer-term talent planning.