LinkedIn will overhaul its annual bonus structure from fiscal year 2027, making individual employee performance the sole basis for calculating payouts under its corporate bonus programme.
The Microsoft-owned professional networking platform currently bases annual bonuses equally on company and individual performance, with each accounting for 50 per cent of the payout. Under the revised system, the company-wide performance component will be removed, placing greater emphasis on employees’ individual contributions.
According to a report by Business Insider, an internal memo said the change is intended to strengthen the link between employee contributions and rewards. A LinkedIn spokesperson also confirmed that the revised structure aims to establish a more direct connection between individual performance and bonus payouts.
Although bonus targets will remain unchanged, the company has clarified that these do not guarantee a fixed payout. Employees who perform above expectations could receive higher bonuses, while those with lower performance ratings could receive less. Managers will continue to differentiate payouts based on individual performance.
The revised policy will apply to employees covered by LinkedIn’s corporate bonus programme. Sales employees, whose compensation is linked to sales quotas, are excluded.
LinkedIn has said that removing company performance from the bonus calculation will not affect the funding of the bonus plan. The company’s overall performance will remain important, even though it will no longer directly determine the annual bonus calculation for employees covered by the revised policy.
The move comes as major technology companies sharpen their focus on individual accountability and performance-based compensation. LinkedIn’s parent company, Microsoft, has also revised its performance review system this year, introducing greater differentiation between employee performance levels, according to Business Insider.
The bonus overhaul follows cost-cutting measures at LinkedIn in May, when the company laid off employees and announced reductions in spending on marketing campaigns, vendors, customer events and underused office space.
The change marks a shift in how LinkedIn rewards employees, with individual performance set to carry greater weight in determining annual financial incentives from FY27.
