What is the difference between at-risk pay and bonus pay?
Executives receive a salary for performing their ongoing responsibilities. Part of their base salary includes variable pay that has to be re-earned every year based on their performance: what they achieved and how they achieved it. This performance-based variable pay is also called “at-risk pay” and has been in place since 1999. Under this system, executives are expected to deliver key results tied to their department’s business objectives, Government-wide program and management agendas. It is a percentage of base pay, which, based on performance, varies from year to year and is at the discretion of the deputy head. It is not a pre-agreed lump-sum bonus target such as many executives earn in the private sector. Bonus pay can only be awarded for exceptional achievements above and beyond the achievement of the commitments set out in the performance agreement. No performance pay (at risk or bonus) is awarded for performance that does not meet expectations.
