BAG: No compensation for late bonus targets

Germany’s Federal Labor Court ruled that employees cannot claim compensation for late bonus targets if the employer later sets a fair target. The case involved a manager who argued he would have earned more if targets had been set on time for 2021.

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Ruling: No compensation for late targets

Germany’s Federal Labor Court (BAG) ruled on May 20, 2026 (case no. 10 AZR 88/25) that employees cannot claim compensation for late bonus targets if the employer later sets a fair target. This means if your employer misses the deadline for setting bonus goals but later fixes a reasonable target, you can’t demand extra money for the delay—even if you think earlier targets would have been lower.

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Why the court decided this way

The company’s bonus system required targets to be set by November each year. The rule was unclear: Could an employee claim compensation if targets were set late but still fairly? The court had to decide because the manager argued he would have earned more if the company had set targets on time.

What happened in this case

A manager in the chemicals division earned a base salary plus a bonus tied to company profits (PBT). The company was supposed to set profit targets by November 2020 for 2021 but only did so in March 2021—first at €18.2 million, then correcting it to €60 million. The manager argued he would have earned more if the target had been set at €18.2 million on time. The court disagreed, saying the €60 million target was fair and final.