Performance Bonus (With Meta E5 Example)

This video breaks down how performance bonuses work in the tech industry, focusing on their structure, key variables, and real-world examples—especially from companies like Facebook. It underscores how these bonuses are a significant portion of total compensation and are both performance- and timing-sensitive.

• Performance bonuses are calculated using a base percentage tied to level and salary, and then adjusted by two multipliers: individual performance and company performance.
• Company performance multipliers vary, often based on metrics like revenue or stock performance. For example, Facebook’s company multiplier was 90% in late 2017, despite its historically strong track record.
• Individual performance multipliers reflect how well someone met expectations (e.g., "meets all" equates to 100%), and strongly influence the final bonus amount.
• Bonuses are only paid if still employed at payout time, meaning even working a full half-year won't earn a payout if the person leaves before the bonus distribution date.
• Payout examples help contextualize the numbers: a senior engineer at Facebook with $62K eligible earnings, a 15% target bonus, and multipliers of 1.0 (personal) and 0.9 (company) would receive about $8,300—paid out roughly two months after the performance period ends.