If you’ve been working at AbbVie through the month of March, you’ll know a bonus has come your way. You would have needed to be an eligible employee in November of the prior year, but come March, it’s payday!
But it doesn’t show up a “Bonus” on your paycheck – it’s an acronym.
Let’s explain what these acronyms are, who is eligible for which kind of bonus and what to expect going into the future.
Cash Profit Sharing (CPS) Bonus
The CPS Bonus plan is for employees who don’t participate in an annual incentive plan, but who the company wants to recognize with a financial reward.
The CPS is based on AbbVie’s company performance during the prior year, not based on your performance in the company. It’s calculated based on AbbVie’s earnings per share, which is calculated based on how many shares investors own and how much profit the company made. Depending on the results of this calculation, your bonus could be as much as 8% of your eligible earnings.
Sales Incentive Plan (SIP) Bonus
Another bonus that can be achieved is linked to the sales or product promotions that you achieve throughout the year. While each employee and unit have their own goals and targets, the further these are surpassed, a larger financial incentive can be received.
AbbVie Incentive Plan (AIP) Bonus
When you achieve certain grade level, your CPS bonus becomes your AIP bonus. Instead of solely relying on the company’s performance throughout the year, it now becomes a multitude of factors that your bonus is comprised of. As can be seen below in the graphic, your role can put you into one of three categories: the Global Plan, Area Plan or Affiliate Plan.
While the AIP is now based less on AbbVie’s overall performance, it’s more related to that of activity in your area, but mostly based on your performance.
As you go through your annual review and receive an updated Annual Rewards Summary, you’ll be able to see what plan you’re on (Global, Area or Affiliate) and what the target payout was of your salary. This target bonus is usually a lot higher than the 8% maximum found in the CPS. You’ll then see based on your performance and other factors related to your plan, what your actual payout would be. In years when you and the company perform well, your bonus could be well above the target payout.
And this cycle continues…. based on your performance and that of the company next year, your bonus will be based on that.