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Revenue Strategy & Leadership

Here are the biggest trends in incentive compensation

Some companies are struggling to perfect comp plans.

less than 3 min read

“Show me the incentive, and I’ll show you the outcome,” said the late great Charlie Munger. The longtime business partner of Warren Buffett was onto something. Incentive compensation can do a lot for a company in theory. It can motivate high performers to keep blazing new trails and help middling talent take the next step.

According to CaptivateIQ’s “2025 State of Incentive Compensation Management Report,” incentive compensation is both growing in popularity and becoming harder to perfect.

The report found that 59% of companies are relying on incentive compensation to fuel growth in 2025, but outdated processes are holding many of these programs back from attaining that growth.

There is also a lack of confidence in the durability of such programs: Less than 30% of leaders said their compensation strategy is very prepared for economic shifts and market volatility.

Moreover, companies seem to be scrambling to create effective comp plans: A combined 66% of companies answered that they have overpaid or underpaid commissions in the past year alone.

These findings aren’t solely for the attention of sales reps. One of the most striking trends from the report was the growing movement to expand incentive compensation plans beyond traditional consumer facing roles.

Nearly three-quarters (72%) of organizations plan to expand incentive compensation programs to new departments, such as marketing, finance, and HR, over the next few years.

The report also found that reviewing and adjusting plans more frequently correlates with higher revenue performance: Companies reviewing performance weekly versus annually reported have almost double significant growth. Despite this, CaptivateIQ found that even intuitive adjustments are often overlooked.

The big takeaway seems to be that outdated processes are hampering business practices beyond just AI and technological innovation. Incentives may be a powerful tool for progression and productivity, but they need to exist in the correct framework to be effective.

For the people behind the pipeline.

Welcome to Revenue Brew—your twice weekly dose of sales savvy. From game-changing tech to cutting-edge GTM strategies, we're brewing up insights that will help you crush your targets.

For the people behind the pipeline.

Welcome to Revenue Brew—your twice weekly dose of sales savvy. From game-changing tech to cutting-edge GTM strategies, we're brewing up insights that will help you crush your targets.