Employer refusing to payout on long service incentive scheme

mightbedave

In 2018 I was put on a 3 year incentive scheme which ended at the end of 2020 and is due to pay out in April 2021. It was based on personal objectives and revenue targets being hit in 2018, 2019 and 2020. Revenue targets were missed by a long way in 2018 and 2019 but amazingly we hit it in 2020. Personal objectives were hit throughout.

My employer is refusing to payout because they said the target set at the start of 2020 was a lot lower than they thought it would be in the business plan of 2018. The scheme letter says that the targets for 2019 and 2020 would be set at the start of those years and the scheme would pay out pro rata if some targets were hit and some missed. By the scheme letter I should be due one third of the total amount for everything being hit in 2020. Employer is refusing to budge and I don't know what to do. Any advice?

Thanks in advance! I really don't know where I stand here.

(I enjoy my job and have worked here for many years so quitting isn't really on the cards. I find it ironic that a long term incentive scheme that a small group of us were put on "to retain top talent" is actually ending up demotivating us.)

getmore4less

Bit of a catch 22 you can tell them you are not happy but can't do anything about it.

Often this ends up as a game play in knowing who the stakeholders are and the pecking order so you can start to address the problem of the company basically making it up as they go along or blatant lies.

If you know where the decision has come from and it is not the top there may be options to get it addressed.

Moving forward any attempt to introduce new motivations and targets it can be pointed out that they did not honour the last ones so you don't believe they will honour these new ones

If it is a group of you then get together to show a united front on this

the company needs to understand that mutual trust is needed to get the best out of everyone and they need to buck up their side of the employment bargain..

mightbedave

getmore4less said:

Bit of a catch 22 you can tell them you are not happy but can't do anything about it.

Often this ends up as a game play in knowing who the stakeholders are and the pecking order so you can start to address the problem of the company basically making it up as they go along or blatant lies.

If you know where the decision has come from and it is not the top there may be options to get it addressed.

Moving forward any attempt to introduce new motivations and targets it can be pointed out that they did not honour the last ones so you don't believe they will honour these new ones

If it is a group of you then get together to show a united front on this

the company needs to understand that mutual trust is needed to get the best out of everyone and they need to buck up their side of the employment bargain..

Thanks. Yes, it's a bit of a funny one. There are only a few of us on the scheme but for that reason it was strictly confidential so I don't know who else was on it although I can guess. I reckon that senior management forgot about it. The CEO who signed the letters retired last year and the project director from that time has moved to a different role.

Having missed the revenue targets by so much in 2018 and 2019 and then the pandemic last year I had mentally written it off and forgotten about it. I only remembered when I found the letter when doing some filing. 

I think my line manager is on the same scheme although he hasn't directly said. I think he is in a similar position to me in being generally happy in his job so not wanting to make a huge fuss about this. I'm inclined to kick up a small fuss but the long term risk of being seen as disruptive feels potentially more costly than this bonus. It also feels a bit morally wrong to push for this when the wider company performance is not great and people are being made redundant. 

I might just work a bit less hard for a while! 

steampowered

Would you say it is "black and white", based on the LTIP documents, that you should be paid?

If so, it might be worth writing a formal email or email to the person who is responsible for administering the LTIP - possibly your line manager, possibly in HR? The email would specifically draw their attention to the signed LTIP documents, state what is due, and ask for payment.

You can do that in a polite but formal way - no need to threaten quitting. Any good employer should respect agreements that were signed !

As it has been a few years, it is entirely possible that the employer has forgotten about what they agreed to and just needs reminding.

moneysavinghero

Been through lots of these sorts of schemes in various jobs. Never had one of them pay out. Usually will have a clause that says any payment is discretionary.

From a business point of view once it comes to payment day they have already had the benefit of your increased effort so why bother paying.

mightbedave

steampowered said:

Would you say it is "black and white", based on the LTIP documents, that you should be paid?

If so, it might be worth writing a formal email or email to the person who is responsible for administering the LTIP - possibly your line manager, possibly in HR? The email would specifically draw their attention to the signed LTIP documents, state what is due, and ask for payment.

You can do that in a polite but formal way - no need to threaten quitting. Any good employer should respect agreements that were signed !

As it has been a few years, it is entirely possible that the employer has forgotten about what they agreed to and just needs reminding.

The document has some grammatical errors and is clumsily worded. It clearly wasn't checked thoroughly enough. For example the cover letter says the payment is based on salary at the end of the scheme and the attached rules say it is based on salary at the start (tiny pay rises in that time means it actually makes little difference.)

I would say on the reason they are saying it won't pay out it is black and white. They are saying it was based on the targets as they were in 2018 but the document clearly states that targets for 2019 and 2020 would be confirmed at the start of those years. If it was based on the targets as they were in 2018 why not just write them in the document? 

mightbedave

moneysavinghero said:

Been through lots of these sorts of schemes in various jobs. Never had one of them pay out. Usually will have a clause that says any payment is discretionary.

From a business point of view once it comes to payment day they have already had the benefit of your increased effort so why bother paying.

That's really bad. It's the first time I have experienced anything like this. Usually these type of bonus schemes have either paid out or it has been obvious why they haven't with targets having been missed. 

Interestingly this scheme doesn't have the usual discretionary get-out clause. I think they must have forgotten to put it in.