As we wrap up 2025 and head toward bonus season for many companies, let’s take a closer look at some incentive compensation headlines that are shaping the performance management industry.
Wall Street is coming in hot for bonus season
In 2025, Wall Street is on track for a major rebound — with year-end bonuses projected to be the biggest payouts since 2021. Business Insider reports that traders are expected to see the biggest raises — up to 25% — thanks to a return of market volatility and deal flow. M&A advisers and wealth managers are also in for healthy bumps, while traditional asset management, hedge funds, and even private-banking desks should see moderate boosts.
But it’s not just about big checks. The bonus boom comes with a sobering caveat: Banks are expecting to shrink headcount by 10–20% over the next few years — thanks largely to accelerating adoption of artificial intelligence. Many current roles — from junior analysts to back-office and support staff — could be automated out. Even firms hiring aggressively for new AI-tech roles are contributing to the structural shift. Banks and brokers are scrambling to lure engineers and data scientists, offering six- and even seven-figure pay packages to stay competitive.
Bottom line: This year could be Wall Street’s bonus comeback — but also the moment the AI-driven thinning of the workforce begins in earnest.
Warner Bros. Discovery is dangling a big carrot
According to the Hollywood Reporter, the media giant has cast substantial bait to keep its top officers on board during a potentially messy merger: A $38.7 million cash bonus pool awaits executives once a deal with Netflix — or another buyer — officially closes.
Individual payouts could reach up to 150% of base salary for “New Company Employees” — those slated to stay on post-merger — but only if they remain in place through the full transaction.
This lifeline is designed to reassure high-level talent during 12–18 months of uncertainty, covering executive officers and likely senior staff. And the strategy is no accident. As WBD navigates a potential sale or spin-off, the leadership wants to prevent defections when stakes — and payoffs — are high.
What’s more, the bonus plan only kicks in upon deal close — meaning executives get their reward only if WBD successfully completes the merger or separation. Bottom line: Facing a high-stakes sale or restructuring, Warner Bros. Discovery is betting big on retention — doling out millions to ensure its top team sticks around until the final curtain.
The pay roller coaster for top executives may finally be leveling off
According to a new analysis by Gallagher, after big jumps in 2024 — fueled by market rebound and generous long-term incentives — executive compensation growth is cooling off.
As corporate boards wrestle with investor pressure, regulatory scrutiny and economic uncertainty, many are rethinking pay strategies.
Instead of across-the-board raises, there’s a clear pivot toward performance-based compensation tied to long-term value creation. Data backs the shift: In 2024, median CEO pay rose 9.7% among the broad group of public companies (up from 5.1% in 2023), and 7.7% within major firms — yet that’s already slowing. Boards are under pressure to balance the need to attract and retain talent, while satisfying shareholders and avoiding public backlash.
The result? More CEOs are seeing pay packages tied to measurable performance—not just title, tenure, or stock-grant timing. Across industries, this means compensation is increasingly shaped by long-term metrics, rather than guaranteed pay bumps. That said, one overarching trend stands out: Executive pay is beginning to look the same everywhere. A growing standardization — partly driven by disclosure rules — risks blurring the link between pay and value creation.
Elon Musk could land the biggest incentive package in human history
In a blockbuster vote this week, CNN reports that Tesla shareholders green-lit a jaw-dropping compensation plan for CEO Elon Musk — a package with a potential payout of up to $1 trillion over the next decade if performance targets are met.
The deal is entirely stock-based — Musk won’t draw a regular salary.
Instead, his compensation hinges on hitting aggressive milestones: significantly boosting Tesla’s market valuation (eventually to about $8.5 trillion), delivering massive volume in vehicles, and scaling up ambitious projects like robotaxis and humanoid robots. If Tesla hits each milestone, Musk stands to receive more than 423 million new shares, potentially expanding his ownership in the company to around 25%.
Supporters argue this aligns Musk’s incentives with long-term shareholder value — tying his payoff directly to Tesla’s success as it pivots toward AI, robotics, and autonomous mobility. Critics, however, warn the targets are wildly ambitious — with Tesla under pressure from slowed sales and growing competition. They argue the package concentrates too much power in one person and could reward failure if goals are only partially met.
So, Wall Street bonuses are roaring back in 2025 and Warner Bros. Discovery is dangling big retention payouts during its merger saga. That said, Executive pay growth is cooling as boards push performance-based rewards. Oh, and the richest man on the planet could become the first trillionaire.
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