Pay your team for what AI produced, not for using it

Short answer: Ralph Lauren added an AI scorecard to its executive bonus plan, and Reuters reported about 12% of S&P 500 companies disclosed AI goals in incentive plans this year, up from 5% in 2024. For an agency, the lesson is simple: pick the one business number AI should move, baseline it this week, and reward that number. (Modern Retail, Oct 27, 2026; Ralph Lauren 2026 proxy)

TLDR

• Ralph Lauren's AI scorecard measured learning completion and employee surveys. It could move bonuses by up to 10%. (2026 proxy)
• About 12% of S&P 500 companies disclosed AI goals in executive pay this year, up from 5% in 2024. (Reuters, via Modern Retail)
• Reward hours saved, response time or cost per booked call. Not usage.

What did Ralph Lauren do?

Ralph Lauren's 2026 proxy statement says AI metrics "in the form of a scorecard replaced citizenship and sustainability metrics as our strategic goal modifier in the short-term incentive plan with KPIs tied to critical business priorities that focus our executives on AI literacy and enablement."

The scorecard included two learning completion rate KPIs and two employee survey KPIs. The company exceeded the targets, and the Talent Committee approved a 10% upward adjustment to the bonus payout.

Read that carefully. The scorecard measured literacy and enablement. Revenue and adjusted operating profit margin were each weighted 40%, and the proxy says financial results were "significantly above target" anyway. Nothing in the filing says AI drove the payout.

Is this common?

Not yet in retail. Anna Hensel reported in Modern Retail on Oct 27 that tying AI to pay is "still a mostly unheard-of practice" in the retail industry. Across the S&P 500, Reuters reported "about 12% of companies in the S&P 500 index disclosed AI-related goals in their executive incentive plans this year, up from 5% of companies in 2024." Many are tech companies like Salesforce or IBM.

That is a big-company number. It says nothing about a 15-person agency. (Opinion, Head of Content)

What do the recruiters and pay advisors say?

Anish Shah, CEO of executive recruiting firm Ruckus, told Modern Retail: "Cost cutting can be helpful for a business, but I think everyone's goal is revenue growth."

He also described smaller teams: "Let's say, maybe years ago, a CMO might come in and need to have a team of 10. The idea is now, well, maybe you have a team of three or four, and AI can fill in some of those gaps."

Shah raised a growing concern about employees using AI to produce "slop," or more sub-par work.

Cory Morrow, a senior client partner at Korn Ferry, said incentive plans set the tone for "what is important to the company for this year," and "incentive design will always be primarily driven by company financial performance."

"Tie it to a number the client would pay for: faster lead response, fewer hours per report, more booked calls. Never logins, prompts or seats. Pay for activity and you get activity."

What does rewarding usage cost?

You pay for activity. People learn to show activity. The rework lands on whoever checks the output. (Opinion, Head of Content, drawing on Shah's "slop" concern in Modern Retail)

Set the number before the bonus

1. Pick one number the AI work has to move. Examples: hours per client report, response time on new leads, cost per booked call.
2. Baseline it this week from real data.
3. Set the target and the review date.
4. Tie any bonus or public praise to that number. Never to logins, seats or prompt counts.
5. Add a quality check. Someone reviews a sample of AI-assisted work each month for errors and rework.

Next step

Who: the agency owner or ops lead who sets team targets. What: one AI outcome metric per role, with a baseline and a quality check. When: before your next quarterly bonus or review cycle. How: the five steps above, written into the scorecard you already use.