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Bonus curbs

What are bonus curbs?

Definition:  

Bonus curbs are a cap on the amount of variable salary a worker may receive from the employer.

Wider definition

  • Is a profit windfall tax on companies a form of bonus curb?

Benefits of bonuses

In principle bonuses work across any industry. Compensation for most sales related job involves a bonus. If I expect someone to earn a 50,000 package, do I pay them 50,000? No, I pay them 20,000 and a performance related bonus. If they perform well, they could very well earn more than 50,000. Without bonuses the only way for a firm to handle the ups and downs of the market would be to hire an fire. 

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