Paramount just told employees what their year-end bonuses are — and changed how they are calculated

• Paramount Skydance just told employees how big their year-end bonuses will be.
• Individual performance won't factor in for 2025, and the new calculation could hurt high performers.
• Paramount won the bidding war for Warner Bros. Discovery late last week.

Paramount Skydance is changing how it hands out year-end bonuses for 2025 — and it could hurt payouts for high performers.

For years, Paramount has given eligible salaried staffers a year-end payout called a "Short Term Incentive Plan," or STIP, that's based on their base salary, their individual performance, and the business's performance. The bonus is calculated by taking the so-called "STIP target amount" times the individual and business multipliers.

Paramount, which beat Netflix last week in the bidding war for Warner Bros. Discovery, told eligible employees on Monday morning that the 2025 business multiplier is 94%, according to internal documents viewed by Business Insider. That's down from 136.7% in 2024, per Paramount's proxy statement last year and three employees. That's a year-over-year decline of more than 30%.

The company also said that an employee's individual multiplier this year would be 100%, regardless of how they performed. Employee reviews were "deprioritized" after the Paramount-Skydance merger was finalized, a veteran staffer said.

"Given the unique circumstances of 2025, we will not be applying individual differentiation this year," a Paramount manager told their team on Slack, according to a screenshot viewed by Business Insider. "As a result, everyone will receive the same Individual Multiplier and Business Multiplier, based on overall fiscal year 2025 performance."

Some Paramount employees, including lower-level staff, aren't eligible for bonuses. A Paramount spokesperson declined to comment.

These changes mean high-performing employees, if you define them as those who had an individual multiplier of over 100% last year, will see their year-end STIP bonuses fall by at least 30%.

Four Paramount employees told Business Insider that their STIP bonus is usually about 10% of their salary. A fifth staffer said their bonus is typically in the mid-teen range.

As an example, an employee earning $100,000 per year might have a $10,000 STIP target. If their individual multiplier was 100% and the business multiplier was 94%, their bonus would be $9,400.

Last year, a staffer on a $100,000 salary with a $10,000 STIP target would have had a bonus of at least $13,670 if their individual multiplier was 100% or more.

Paramount's reworked bonuses, which will be paid out next Monday, come as Paramount CEO David Ellison and his father, Oracle cofounder Larry Ellison, are set to shell out billions for WBD.

"We appreciate your contributions to Paramount throughout 2025," Paramount told employees in its STIP letter, which was viewed by Business Insider.