Salesforce halts raises for senior employees while boosting bonuses up to 140%

Salesforce has decided to withhold salary increases for its director-level and senior employees this year, even as it raises bonus payouts and expands stock-based compensation for top performers.

The move, outlined in an internal memo seen by Business Insider, signals a shift in how the company is rewarding senior talent, with greater emphasis on performance-linked incentives rather than fixed pay increases.

SHIFT FROM SALARY HIKES TO PERFORMANCE PAY

Under the revised compensation approach, merit-based salary increases will be limited to employees at the senior manager level and below. For more senior roles, Salesforce is instead increasing stock grants and bonus pools, describing the move as an “investment in performance and long-term growth.”

Employees will be informed of their updated compensation during performance review cycles beginning at the end of March.

The decision marks a clear pivot away from predictable pay rises towards variable, performance-driven rewards for senior leadership.

BONUSES AND STOCK GRANTS SEE SHARP INCREASE

According to the internal communication, bonus pools for senior employees have been funded at 103%, with most eligible directors receiving full or higher payouts. Those rated among the highest performers are set to receive between 115% and 140% of their target bonuses.

Stock-based compensation is also being expanded. Around 10% more directors and senior directors are expected to receive stock grants, while the average grant size has increased. Among those rated “highly successful” or “exceptional”, roughly 80% will see stock awards rise by 20% to 40%.

BIG TECH REWRITES SENIOR PAY MODELS

The changes at Salesforce reflect a broader recalibration across the technology sector, where companies are increasingly tying senior compensation to long-term performance and equity rather than fixed salary growth.

This approach allows firms to preserve cash while aligning leadership incentives more closely with shareholder returns. Similar trends have emerged elsewhere in Big Tech, where stock-based rewards are being used more aggressively to retain top talent.

At the same time, the shift comes against a backdrop of market pressure. Salesforce’s stock has declined by around 37% over the past year, even as the company navigates investor concerns around the impact of artificial intelligence on software businesses.

AI, COST DISCIPLINE AND WORKFORCE RESET

The compensation changes also align with Salesforce’s broader strategic reset, which includes tighter cost management and a growing focus on AI-led transformation.

As previously reported by People Matters, the company has been actively exploring how AI agents are reshaping jobs, leadership expectations, and workplace skills. It has also indicated a reduced need for certain hiring in engineering roles as automation capabilities expand.

Together, these shifts point to a deeper restructuring of both workforce strategy and reward philosophy in response to technological change.

WHAT IT MEANS FOR TALENT STRATEGY

While the company continues to reward high performance, the absence of base pay increases for senior roles could raise questions around morale and retention, particularly in a competitive talent market.

However, by linking a larger share of compensation to bonuses and equity, Salesforce appears to be betting that long-term incentives will remain a powerful tool to retain and motivate leadership.

As performance reviews begin, the effectiveness of this approach—and its impact on employee sentiment—will be closely watched, both within the company and across the wider tech industry.