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Revolut has commenced distributing cash bonuses to its employees as part of a transformation of its compensation strategy, moving away from a past approach that only offered bonuses in shares.
The fintech firm based in London, which provided approximately £180 million in share-based compensation to staff in 2024, updated its annual performance bonus plan last year to include cash awards for the first time, as reported in its annual report and by insiders.
This update allows eligible employees to receive performance bonuses as a combination of cash and equity, solely in shares, or entirely in cash, based on their job roles and seniority, as stated by sources. Previously, all bonuses for staff were exclusively given in share awards.
This policy shift is anticipated ahead of a significant initial public offering for Revolut in the upcoming years. Despite appeals from UK officials, the company leans towards listing on Nasdaq in the U.S. rather than London, according to previous reports by the Financial Times.
Last year, Revolut achieved a valuation of $45 billion in a secondary share sale, reinforcing its status as the most valuable start-up in Europe. The share sale brought in around $500 million for more than 2,200 employees who sold their shares.
The company mentioned that the newly implemented bonus scheme was driven by employee input, requesting more flexibility in how variable compensation is structured.
Higher-level employees are expected to receive a larger portion of their bonuses in the form of equity, while junior staff will gain a greater cash component, according to someone familiar with the new guidelines.
With the addition of cash bonuses, total spending on wages, salaries, and bonuses reached £485 million last year, marking an increase of nearly 40 percent compared to the previous year, based on its annual report.
During the same timeframe, the company allocated £179 million in share-based payments to employees, marking a threefold increase from the previous year.
“We observed one-off year-on-year increases in staff costs to address the timing of the cash bonuses we extended to a wider group of employees instead of equity and the rise in our share-based payments charge due to the elevated company valuation,” Revolut noted in its annual report.
This week, Revolut announced record pre-tax profits of £1 billion, spurred by an increase in customers and a boom in cryptocurrency trading.
After a lengthy and often challenging three-year journey with regulators, the fintech received a UK banking license with certain restrictions in July last year, marking a key achievement for the company.
Revolut stated: “All positions that were eligible for equity will continue to receive it, as we believe employees should have ownership in the company and act accordingly. The cash element aims to enhance liquidity, especially for our junior team members, in response to their feedback.”
