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Cash Bonus Policy

We are aware that our achievements come through hard and shared work, so we want to express our gratitude, recognizing and celebrating with every Rocketeer all that we have accomplished throughout the year, owning up to our DOTS. And that is how the **Cash Bonus Policy** came to be!

This is a company-wide policy based on our targets of Annual Contract Value (ACV) and Average Monthly Net Burn, bringing along advantages such as:

- Being a new player in engaging the whole team with the company growth;
- A more “liquid” reward in cash, compared to stock options.

The Metrics

- Annual Contract Value (ACV)

Metric that shows you how much an ongoing customer contract is worth by averaging and normalizing its value over one year; The total value of all completed contracts per year.

- Average Monthly Net Cash Burn

Typically used to describe the rate at which a company is spending its capital to finance overhead before generating positive cash flow from operations; A company's net burn is the total amount of money a company loses each month, considering its revenue.

Let's talk numbers!

Let's start off from the table that will determine all the targets to be hit and its corresponding bonus values to be distributed:

Now based on it let's see the possible scenarios:

**Less than 85%:**In this case the bonus**will not be applicable**, since the threshold for the bonus to become available is achieving at least 85% of the set target.**85% of the target:**You’ll receive**25%**of your base bonus based on your role.**100% (9M ACV and 607K Cash Burn) of the target:**You’ll receive**100%**of your base bonus based on your role.**110% (10M ACV and 540K Cash Burn) of the target:**The payout doubles! You'll receive 200% of your base bonus based on your role.**125, 135 or 145% of the target:**25% of gradual increase, respectively 225, 250 and 300% of payout. Overperformance is limited at 300% payout.

Now let's talk about the "base bonus based on your role" section of the specifications above. These refer to the following table, which determines the payout multiplier according to the Rocketeer's role.

The 3 Rules

To guarantee the best functioning of this policy we have the following basic rules:

**Rule #1: Follow the table!**

To find how much will the payout be according to the target it, simply find the hit target value in the "Target Grade" line, follow the vertical and below it find the corresponding payout. Just like illustrated in the scenarios above.

**Rule #2: One target can compensate the other, with a minimum average of 85%.**

The Rule #2 determines that the metric targets can compensate each other, so achieving 75% of the ACV metric and balancing that with achieving 110% of the Net Burn metric, equals a final result of 100% achievement. *Still, it's important to remember that the minimum average of achievement to generate the bonus is 85%.*

**Rule #3: For people that joined the company during the year until Sep/30, bonus will be paid proportionally for the months they were onboard (considering at least 15 days to count the month).**

The final rule states that any full-time employee in Rocket.Chat is eligible to receive a given year's bonus as long as they join the company until Sep/30, which is enough time to finish the 3-month experience period before the year ends. Also, if you joined the company in the current year, your bonus will be calculated proportionally to the number of months you have in the team. Check out some examples:

A few other important details

For this section, our starting point will be the questions that you may have on your mind now. So let's use them to make some other important points about the policy clearer.

- 1.
**“Who does it apply to?”**Everyone, except interns and part-timers, joining the company until September/30th of current year. - 2.
**“When will the payment be done?”**March/2023. - 3.
**“I got promoted this year and changed tier on the base table, will I receive one or two monthly salaries?”**That depends! By rule you’ll receive the salary of the position or "role tier" where you remained longer during the year. If you stayed the same time in both positions, you’ll get the higher payment. - 4.
**“I received a raise in the end of the year, does this mean I’ll get the value of my previous salary?”**The salary base will be the salary paid in the month of December/22, including raises during the year. - 5.
**“I’m leaving the company in February, can I have my bonus advanced instead of only in March?”**The exit policy will be that the bonus will be paid*only for people active in the Company in the month of payment*. - 6.
**“Where can I keep up with these two indicators?”**The Finance team will do a quarterly update during the All-hands Finance Deep dives.

To join the discussion dedicated to answering questions about the policy on Rocket.Chat, click here.

Last modified 2mo ago

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