By Kelly Cloonan

Peloton Interactive's board approved a redesign of its executive compensation program in an effort to boost its focus on performance-based pay.

Under the new plan, Peloton's leaders will transition to a base salary with an annual cash bonus opportunity over a two-year period beginning in the current fiscal year, according to a filing with the Securities and Exchange Commission on Tuesday.

Each executive will receive a base salary at an annual rate of $850,000 for the remainder of the current fiscal year, which started July 1, and $635,000 for the next fiscal year.

The executives will also be eligible for an annual cash bonus targeted at 20% of their pro-rated base salary this fiscal year and 60% of base salary in fiscal 2027, the company said.

During the transition period, annual bonuses will be subject to a payout of between 0% and 200% of the target opportunity based on assessments of both operational performance and achievement toward strategic goals, as recommended by the company's chief executive.

The company also made changes to its long-term incentive compensation plan. Starting this fiscal year, long-term incentive awards will consist of 70% of time-based restricted stock units and 30% of performance-based restricted stock units.

The company's board had approved a transition toward a mix of the two awards beginning last fiscal year, compared with long-term incentive compensation tied solely to time-based restricted stock units previously.

The updated compensation plans aim to reflect Peloton's pay-for-performance philosophy as well as align with prevailing market practices, the company said.

Some of Peloton's leaders who joined last fiscal year already have compensation packages that reflect the new compensation philosophy, the company added.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

September 16, 2025 17:26 ET (21:26 GMT)

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