In a recent department all-hands, we got to hear that raises are going to become a thing of the past for a lot of us:
“…the composition of your compensation may look a little bit different. So you’re going to see more of your compensation reflected in your AIP and LTI and potentially less in your merit. That’s just how the new structure is set up… That gives us more of that merit pool to focus on those lower grade employees that don’t have that full package, who don’t have AIP and LTI. And so we can give more merit dollars to the folks where it will make more of an impact to their day to day lives, and compensate our executive management the way that the package allows us to do so, focusing more on the AIP and LTI. It is still discretionary; it will be discretionary to managers to decide how they want to distribute that, so I’m not saying that if you get AIP and LTI you’ll never get merit, that’s not what I’m saying... that’s not the message I want you guys to take away. You will still be compensated, it just may look a little different. You might not get as much merit. Maybe in some cases you don’t get merit, but you’re getting more AIP, you’re getting more LTI…”
Thoughts:
AIP: If an employee's base never changes, the AIP will likely not change either as it is a % of your base. Also consider how many times you actually hit 100% of your AIP goal.
LTI : This gives the company 3 free years as your "award" has to vest over that much time. When you leave (for whatever reason), you lose all that in between money. An award in 2026 is not seen or heard of again until 2029. Considering their pro-attrition stance...