LinkedIn will tie corporate bonuses entirely to individual performance from FY27

Under the formula LinkedIn is retiring, half of every corporate bonus moved with company performance and half with the individual's ^[2]. A manager's rating shaped only the second half ^[2]. From FY27 the whole end-of-year payout follows individual performance during the fiscal year ^[3], so the share of the bonus that rests on an individual assessment doubles, from 50% to 100% ^[18]. Business Insider, which viewed the internal memo ^[1], wrote that the change moves pay "away from a model in which employees shared in the company's financial success and gives managers greater influence over bonus decisions" ^[10].

LinkedIn presents it as pay for performance. "At Linkedin, we believe you should be recognized and rewarded for the impact you make," the memo states ^[15]. A LinkedIn spokesperson said: "We're updating our bonus plan to create a more direct connection between individual performance and bonus payouts" ^[8]. Staff are also told that "your manager will continue to differentiate bonus payouts based on individual performance" ^[9]. Managers already differentiated half the bonus. From FY27 they differentiate all of it ^[3].

The timing invites a cost reading. In May, LinkedIn laid off employees and said it would scale back spending on marketing campaigns, vendors, customer events and under-used office space ^[13]. Chief executive Daniel Shapero told staff then that the company needed to operate more profitably ^[14]. On money, the memo is direct: "This change to remove the corporate component won't impact the funding of our bonus plan" ^[4]. Bonus targets are unchanged as well ^[6], though "Bonus targets remain targets, not guaranteed payouts" ^[16]. The memo does not explain how the pool will be sized once company results leave the formula, saying only that "How we perform as a company continues to be important" ^[5].

Taken at its word, the memo describes a redistribution of bonus money among corporate staff, with the total left intact ^[4]. If the pool keeps its size, a larger payout for one employee is paid for by smaller payouts for others, and the memo says plainly that "lower performance may result in a lower payout" ^[9]. The trade-off runs in both directions. Under the 50/50 formula, a weak rating in a strong company year was cushioned by the company half, and a strong rating in a weak year was diluted by it ^[2].

LinkedIn's parent has moved the same way. Microsoft, which owns the network ^[17], overhauled its performance review system this year, making performance distinctions significantly sharper ^[12]. Other major tech companies have been tying more compensation to individual performance, according to Business Insider, with some offering bigger rewards to top employees while tightening expectations for those who fall short ^[11].

What LinkedIn has changed now is a formula. The consequence arrives with the first FY27 payout, when a manager's assessment sets the entire bonus for everyone in the corporate program; quota-carrying sales roles stay on their own plans ^[7]. I'd expect disputes over ratings at LinkedIn to become disputes over pay from that payout on, because no part of the bonus will sit outside a rating ^[18].