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Bonus Removal Offer

Find information about the Bonus Removal Offer in some public entity executive contracts.

The Bonus Removal Offer and the PEER Policy

On 4 February 2020, the Public Entity Executive Remuneration Policy (PEER Policy) was updated to prohibit bonus opportunities for executives employed in prescribed public entities.

The removal of bonus opportunities followed a review by the Victorian Public Sector Commission of executive employment in the public sector (Industry Segment Reviews), which found bonuses are generally not effective in driving performance or efficiency and recommended public sector executives should no longer be eligible for bonuses, subject to very limited exceptions.

Employers were required to make bonus buy-out offers to executives in exchange for removal of bonus opportunities in executive contracts. These offers, based on a standardised calculation, must have been made by 1 May 2020 and implemented by 1 July 2020. Implementation is now complete.

If an executive did not accept the buy-out offer, they will continue to be eligible to receive bonuses in accordance with their contractual terms until the contract expires.

All contracts for executives in prescribed public entities entered into on, or after, 4 February 2020 must not include a bonus opportunity, subject to limited exceptions under the PEER Policy. Please see the PEER Policy website for further information.

Useful materials

Public entities and executives can refer to the Bonus removal policy fact sheet below for guidance on how to implement the buy-out process.

Bonus removal policy fact sheet Word 89.16 KB (opens in a new window)

Further information

For further information on the PEER Policy, please visit the PEER Policy website.

For questions regarding the Bonus Removal Offer, please contact publicsectorworkforce@dpc.vic.gov.au

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Updated 2 July 2024

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