Employment briefing · 12 June 2026
Five questions to ask about a German executive bonus clause
Read beyond the target percentage: timing, target setting, discretion, entry and exit rules can determine what a bonus is actually worth.
An annual target of 30% looks precise, yet the operative wording may leave important points open. Before valuing the number, establish who sets the targets, when they must be recorded and what happens if the business never finalises them.
1. When are targets agreed?
Ask for a timetable and a clear record. A target communicated late in the performance year is not equivalent to one known from the start.
2. Which parts are personal and corporate?
Understand the weighting, measurement source and whether one component can reduce the complete award to zero.
3. Where does discretion remain?
Words such as “may,” “voluntary” and “at the company’s discretion” deserve careful attention alongside any stated percentage.
4. What happens in the joining year?
Confirm pro-rating, target timing and whether payment requires employment on a particular date. The same questions matter for resignation, garden leave and termination.
5. When is payment due?
A bonus for one year may not be paid until well into the next. Consider how the timetable interacts with notice and a future move. These questions are a commercial starting point; a German employment lawyer should assess disputed or unclear legal effect.