Legal Definitions - performance bonus

A performance bonus is an additional payment given to an employee or executive as a reward for achieving specific goals or targets set by the company. It is usually based on the individual's performance and contribution to the company's success.

John is a sales executive who exceeded his sales target for the quarter. As a reward, his company gave him a performance bonus of $5,000 on top of his regular salary.

This example illustrates how a performance bonus is given to an employee who has performed exceptionally well and contributed to the company's growth.