How the Incentive Pay Practices Tool Can Influence Your Plan Design

The 2026 Incentive Pay Practices Survey was released on Tuesday, Oct 6, by WorldatWork and Compensation Advisory Partners (CAP), an executive compensation consulting firm. For the first time, the survey, which has been published since 2007, is now available as an interactive dashboard tool for WorldatWork members and survey participants.

If you have access, you will see that it’s a powerful tool. 

The dashboard gives you the opportunity to view results by applying filters such as:

• Company sector (i.e., publicly traded, privately held, nonprofit, government);
• Private ownership type (i.e., family owned, private equity owned);
• Corporate status;
• Size (i.e., revenue, employees); and,
• Industry.

Access a related Workspan Daily article on this subject:

• Research Reinforces Incentive Pay’s Importance in the Rewards Offering

A Personalized Experience

The interactive tool can help you work through your organization’s unique incentive compensation questions and uncover findings for companies with similar profiles.

Let’s say, for example, you work for a private company with approximately $300 million in annual revenue, and you’ve heard feedback that your target short-term incentive opportunities aren’t competitive with the market. Using the dashboard, start with the filters at the top and select “for profit, privately owned” companies. For revenue size, you can select companies with $100 million to less than $300 million in revenue and $300 million to less than $600 million, since your company is on the cusp of two revenue cuts. For now, leave the other filters unsliced; you can return to them later.

Using the third dashboard tab, called “AIP Design,” you’ll find data on target bonus opportunities as a percentage of salary for each employee level — from CEO to nonexempt employees ranging from the 25th to 75th percentiles and the market average. As a next step, you can review the target bonus opportunities only at privately owned companies with $100 million to less than $300 million in revenue and compare them to the private companies in the range of $300 million to less than $600 million. How do they compare? Should your organization benchmark to one of these size ranges or a blend of both? If you want to look at how your company’s ownership structure impacts incentives, you can filter on “family owned” or “private equity owned” as subsets of the “privately owned” company dataset.

Once you’ve settled on the appropriate market perspective, compare the data to your internal targets and compensation program design. Ask yourself questions such as:

• “What’s our organization’s compensation philosophy?”
• “Do/should we target short-term incentives at median, at 75th percentile or somewhere else in the range?”
• “Are there particular position levels where we’re experiencing talent retention issues that may warrant bonus adjustments?”

Now, consider a public company with $2 billion in revenue that wants to check that its long-term incentive (LTI) plan has competitive threshold and maximum payout levels. Using the filters for “for profit, publicly traded” companies with revenue of $1 billion to less than $3 billion, the “Performance LTIs” dashboard tab reports the prevalence of companies within this market scope that have established threshold, target and maximum opportunities, and the payouts as a percentage of target at each performance level.

Of the companies in this data scope, 74% report having a threshold and 84% report a maximum, indicating this is a common market practice. The actual threshold and maximum amounts vary by employee level but are relatively consistent among executives at 50% of target LTI at threshold and 200% of target LTI for maximum performance. At positions below the executive level, the data shows both threshold and maximum payout levels decrease, meaning there’s a lower barrier to threshold payout and a lower cap on the maximum payout to match the lower risk-reward profile of long-term incentives for mid-level employees.

Informing Your Critical Conversations

Use these insights to evaluate your company’s practices. The dashboard equips you with data for important conversations your executives and Rewards teams are having about incentive pay design. Keep in mind that, as with many issues in compensation, not all issues can be solved with data alone. Understand the market data but seek to balance market practices with internal company factors, such as strategy and culture. Sometimes, it makes sense to deviate from market norms.

Use the dashboard to explore alternatives. Apply different filters and see how the data responds. One of the outcomes of exploring the dashboard is that you’ll gain fluency in what company characteristics impact incentive pay practices the most, and what practices remain relatively consistent across sectors, size and industries.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Compensation
• Executive Compensation
• Finance and Budgeting
• People Analytics