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The Madison Avenue Field GuideA field guide to marketing & advertising, by Brandon Mina

GlossaryAgency & IndustryPerformance-Based Compensation

Agency & Industry

Performance-Based Compensation

Agency pay tied partly to agreed results, such as sales or brand KPIs, usually as a bonus on top of a base fee.

By Brandon MinaCEO, BrandPilot AIUpdated November 2026

Short answer

Performance-based compensation is agency pay tied partly to agreed results, such as sales or brand KPIs, usually as a bonus on top of a base fee. It aims to align agency incentives with client goals. Success depends on choosing fair metrics the agency can genuinely influence and agreeing how results will be measured.