Thelander PC Digest: October 2025

Are Bonuses A Part of Your Total Compensation Program?

Welcome back to the Thelander Digest. This month, we are digging into annual bonuses – who receives them, what percentage of the base salary they are and what is used to set individual performance targets.

Bonuses can be an effective short-term incentive to reward performance in addition to the annual salary. What’s the most effective way to use bonuses? It depends on the type of bonus. There are different versions that include: annual, sign-on, retention, equity, or performance (spot) bonuses. For the purpose of this digest, we are going to focus on annual bonuses to understand how companies are using them.

According to the PitchBook – NVCA Q3 Venture Monitor Report, “fundraising is heading toward the lowest annual commitment since 2017.” As funding has become scarcer, companies increasingly rely on cash bonuses as a retention tool – especially when it comes to their staff-level employees.

When companies do raise capital, not everyone will have an equity refresh, and if they do, the size will depend on many factors including how accurate the initial grants were (a topic for another day!). In the meantime, let’s talk about how cash bonuses can be used as a valuable incentive. They can serve as a performance driver, helping align employees around measurable goals and milestones. Companies are putting formality in place with their compensation structures which is key to retain employees and attract future talent. 

Who is receiving a bonus? 

51% of VPs receive a bonus

45% of Chiefs

44% of Directors 

43% of Managers 

38% of Staff-Level Employees 

How does this change YoY? 

More people are getting bonuses in 2025 compared to 2023, especially for staff-level employees. 

Key Takeaways:

From 2023 to 2024, there was a sizable jump in the amount of people who received bonuses.  

The change is much more pronounced at the staff-level, where the percentage of likelihood increased by ~6% from 33.8% in 2023 to 40.00% in 2024. This trend has continued over the past year, albeit to a lesser extent, with a 0.5% uptick from 2024 to 2025. 

Executives (C-Suite and VPs) have increased to a lesser extent or stayed steady YoY – ranging from 44.5% in 2023 to 47.7% in 2025. 

There are two ways to look at the size of actual bonuses – as a dollar amount and/or as a percentage of the base salary. In the next section, we’ll look at the data as a percentage of base salary, which gives us a better sense of the role bonuses play in overall compensation packages than dollar amounts. 

How big are bonuses? 

As you move down in seniority from C-Suite employees to staff-level employees, so does the median bonus as a percentage of base pay. 

Chiefs bonuses tend to be around 26.4% of their base pay at the median. 

For the VPs, this figure is 20.00% for VPs.

At the Director level and below, the median bonus as a % of base salary ranges from 9.7% to 14.3%. 

Bonus as a percentage of base salary has remained steady YoY, especially for staff-level employees. The only slight change can be seen among executives, whose bonus percentages decreased from 23.00% to 22.5% – likely because companies are not hitting their goals. This aligns with broader market trends we’re seeing. 

By completing the Thelander Private Company Compensation Survey, you will be able to access real-time compensation data for every job title you complete – including base salary, actual bonus amounts, bonus as a % of base salary, total cash, target bonus amounts, target bonus as a % of base salary and equity percentages for founder and non-founders. Complete your response today by clicking here.

What is used to set individual performance targets? 

Milestones / MBO has grown from 74% in 2023 to 80.00% in 2025

Improvement over prior year has also steadily increased from 26% to 31%

Relative to peers went down this year (because companies are hiring less people and making more pointed, key hires)

Budget also decreased by 2% from 2024 to 2025. 

The Thelander Digest is powered by the Thelander Private Company Compensation Survey. Participate today to see how your current organization’s compensation compares to real-time, vetted & leveled market data. We also have year over year trends, a compensation planning tool and interactive regional maps. 

Complete the Compensation Survey Today For More Bonus Data

Thelander Compensation Consulting Services 

The data is only as good as you know what to do with it. Have questions about your cash and equity mix, or thinking about putting a bonus program in place? Respond to this newsletter and a member of the Thelander team will reach out to schedule a call with Jody, our founder & CEO.