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ARTICLE · 28 AUGUST 2025

Modern Bonus Structures: The Rise Of Multi-Factor Incentive Plans

Nelson Mullins Riley & Scarborough LLP
Nelson Mullins Riley & Scarborough LLP
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Nelson Mullins Riley & Scarborough LLP

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As investor expectations shift, regulatory pressure mounts, and business models evolve, compensation committees are moving away from short-term incentive plans that rely solely on a single financial performance measure.

United StatesEmployment and HR
Matthew Zischke
Matthew Zischke

As investor expectations shift, regulatory pressure mounts, and business models evolve, compensation committees are moving away from short-term incentive plans that rely solely on a single financial performance measure. The "one-metric bonus," commonly tied to adjusted EBITDA or EPS, is falling out of favor as market expectations evolve.

This Comp & Benefits Brief outlines how public company boards and compensation committees are responding by adopting annual bonus structures that incorporate multiple performance factors, strategic goals, and clearly governed discretion frameworks.

Investor Pressure Is Accelerating the Shift

Proxy advisors, institutional shareholders, and governance advocates continue to criticize short-term bonus plans that depend on a single metric. Concerns include, but are not limited to:

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