How can I assess if a company's target bonus is realistic before accepting a job offer?

It is reasonable to want more evidence before treating a target bonus as dependable compensation. A target describes what may be paid under stated conditions, not a guaranteed amount, so evaluate the offer using the base salary alone and treat the bonus as variable until the employer provides clearer information.

Ask the hiring manager or compensation team how payouts are calculated, including the relative weight of company, team, and individual performance. Request the percentage of eligible employees in this role or job level who received less than target, exactly target, and more than target during each of the last three years. If they will not disclose exact figures, ask for ranges or the median payout as a percentage of target. Also ask what results produced a zero payout, whether there is a threshold and maximum, whether management can adjust awards at its discretion, and whether targets have ever changed after the performance year began. Clarify your first-year treatment as well: eligibility date, proration, payment date, required employment status on that date, and what happens after a resignation or termination.

Request the written bonus-plan document or an offer addendum describing the formula and eligibility rules. For a public company, its proxy statements may also explain the incentive program’s design, use of discretion, and threshold, target, and maximum framework while reporting certain executive incentive compensation. Those disclosures may provide useful context, but executive plans may differ from the plan covering your position, so they are not a substitute for role-specific answers. If the employer remains vague, compare the offer using three scenarios: no bonus, a conservative payout below target, and the full target. If the base salary does not meet your needs in the conservative scenarios, consider negotiating more base pay or a clearly documented first-year payment. Any guaranteed amount should appear in the written offer rather than relying on a verbal assurance.