Compensation – more than just a bonus scheme and what really matters

In many conversations with clients — both local and international players — the question of the “right” bonus model comes up very quickly. Our broad experience and deep insights into various structures provide us with a strong foundation to be a valuable partner to our clients. We would be happy to share our views with you in a personal conversation. The first quarter is traditionally marked by bonus rounds, fulfilled or disappointed expectations, and heated discussions around executive compensation. In recent years, however, this debate has noticeably cooled down. One reason: bonus payouts across the broader market have become increasingly moderate. At the same time, we’re seeing a fundamental shift. Salary alone is no longer the key driver of job satisfaction and professional fulfillment. This aligns with broader societal trends — values like purpose, identification, development opportunities, and life balance are gaining importance. Talents — especially at the mid to senior level — have become more selective. A new tension exists between a desire for mobility and the structural barriers to change.

Long-term compensation components remain a central topic. Deferred bonuses and carried interest models with vesting periods foster loyalty — but only as long as they are perceived as fair and transparent. When the rules are unclear or alternative offers are lacking, these models can quickly become “golden handcuffs.” The desire to change roles often fails due to high opportunity costs. This is especially true in the private equity context: these models create retention — but they only motivate if they are designed clearly, flexibly, and in line with the corporate culture. Long-term retention is good — but not at any cost. If it feels like a one-way street, its motivational power is lost.

When it comes to bonus and compensation structures, one thing is clear: there is no single “right” model. What matters is finding the model that fits the culture, the talent profile, and the current phase of the company. What works in a growing, entrepreneurial boutique may be counterproductive in an established platform — and vice versa. Discretionary bonuses allow for individual recognition but carry the risk of subjective evaluation. Structured models offer transparency and scalability but often hit limits, especially within  complex organizational structures.