COMPANY PLAYBOOK
Okta
Okta separates total reward into visible components: base pay, company-performance bonus, annual RSUs and an employee stock purchase plan.
System principles
- Connect short- and long-term reward through separate mechanisms.
- Make bonus targets visible in advance by role and level.
- Give employees more than one path to participate in company value.
Tensions and trade-offs
- Company-metric bonuses align direction but can depend on outcomes employees cannot control.
- Equity creates long-term alignment but market volatility makes total reward uncertain.
PRACTICES
How Okta builds its operating system
01
Bonus
Level-based bonus target
A bonus target is set as a percentage of base pay by job level, with payout tied to company performance.
- How it works
- Achievement of annual company goals affects the bonus pool and payout is not guaranteed.
- Why it is used
- Connects short-term cash reward to shared financial outcomes.
- Trade-off
- Distance between individual influence and company outcome can weaken motivation.
- Best fit
- Organizations where company results are explicit and meaningfully linked to employee contribution.
02
Equity
Annual RSU grants
Eligible employees may receive annual RSU grants after their new-hire grant.
- How it works
- Grant value is converted into RSU units using the prior month’s average closing share price.
- Why it is used
- Lets employees participate in long-term company value creation.
- Trade-off
- Vesting and share-price risk separate stated value from realized value.
- Best fit
- Public companies making long-term ownership part of total reward.
03
Equity
Employee stock purchase program
Employees can purchase company shares through payroll deductions under the plan terms.
- How it works
- Voluntary participation and after-tax payroll deductions become recurring share purchases.
- Why it is used
- Adds a direct ownership option alongside grants.
- Trade-off
- Employee income and savings can become concentrated in the same company risk.
- Best fit
- Public companies that can explain risk and plan terms clearly.