A few years ago, Sullivan & Cromwell announced that year-end bonuses would be cut in half, with a maximum of $17,500 for early-career associates and $32,500 for eighth-year associates. In the following two years, bonuses were cut further. However, the trend was then reversed with bonuses subsequently being increased (to range from $30,000 to $65,000 for associates) and more recently, Exhibit 1 shows further increases in bonuses. What drives these bonus decisions and how they vary over time? How does this bonus variability over time compare to variability in salaries over time at Cromwell & Sullivan? What explains the difference in the way salaries and bonuses are managed over time?