Well, I have my own recommendation: Scrap the whole thing. Don’t pay any bonuses. Nothing.
This may sound extreme. But when you look at the way the compensation game is played – and the assumptions that are made by those who want to reform it – you can come to no other conclusion. The system simply can’t be fixed. Executive bonuses – especially in the form of stock and option grants – represent the most prominent form of legal corruption that has been undermining our large corporations and bringing down the global economy. Get rid of them and we will all be better off for it.
In “No More Executive Bonuses!”, Henry Mintzberg