Okta

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.

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.

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.

Okta’s executive PSUs vest 0-200% of target based purely on relative total shareholder return against the Nasdaq Composite across stacked 1/2/3-year performance periods. The FY2026 proxy discloses actual results: three tranches vested at 100%, 100% and 161% of target respectively. Non-employee directors receive a $530,000 initial RSU plus a $245,000 annual RSU; say-on-pay passed with 94.6% support.

How it works

Each PSU tranche vests between 0% and 200% of target over its own one, two or three-year window based on TSR relative to the Nasdaq Composite; the actual vesting percentages are disclosed publicly in the proxy statement every year.

Why it is used

Payout is tied to performance relative to the market rather than absolute share price, which is harder to game and keeps management on the same scale as shareholders.

Trade-off

Full payout is possible even if the absolute share price falls, as long as it falls less than the index; it covers only top executives and does not touch the general employee RSU/ESPP mechanics.

Best fit

Public companies wanting a defensible, formula-driven executive pay structure that can withstand a say-on-pay vote.

The Vision, Methods and Targets framework states company strategy clearly and cascades it up, down and across the company.

How it works

The Vision, Methods and Targets framework states company strategy clearly and cascades it up, down and across the company.

Why it is used

Makes the practice repeatable and visible.

Trade-off

It requires coordination and maintenance capacity.

Best fit

Teams with explicit responsibilities.

Eligible employees receive flexible paid time off, company holidays and sick time as the time-away component of total rewards.

How it works

Eligible employees receive flexible paid time off, company holidays and sick time as the time-away component of total rewards.

Why it is used

Makes the practice repeatable and visible.

Trade-off

It requires coordination and maintenance capacity.

Best fit

Teams with explicit responsibilities.

Regular employees receive a global reimbursement account with quarterly funds for eligible wellbeing expenses.

How it works

Regular employees receive a global reimbursement account with quarterly funds for eligible wellbeing expenses.

Why it is used

Makes the practice repeatable and visible.

Trade-off

It requires coordination and maintenance capacity.

Best fit

Teams with explicit responsibilities.