Do life sciences companies pay like technology companies? On the headline merit budget, yes: the median is 3.5% in both industries. But dig deeper and the two diverge on how merit gets divided, how generously bonus pools are funded, and how equity is structured. Pave’s 2027 compensation budgets and planning survey findings show the breakdown.
This post walks through five findings on merit, bonus, and equity, each shown next to technology for reference.
Merit budgets are rising from the bottom, not the middle
The median planned merit budget is 3.5% in both industries and in both years, but life sciences companies are raising the low end. Their 25th percentile rises from 3.0% to 3.5% for 2027, while in technology, it stays at 3.0%.
For life sciences leaders, that moves the bar: a company planning below 3.5% for 2027 is in the bottom quarter of its peers.
Life sciences companies tie merit less closely to performance
The budget determines how much money is available. How companies decide who gets it is where the two industries differ most.
Life sciences companies rely less on performance ratings when setting merit increases: 74% use them, vs. 95% of technology companies. They are also less likely to consider where an employee sits in their salary range, and more likely to give a flat, across-the-board increase. Both industries factor in market position at the same rate.
Together, that suggests merit cycles in life sciences are more uniform, with employees more likely to receive a similar increase. Respondents could select more than one method, so shares add up to more than 100%.
Life sciences companies fund bonus pools more generously
Merit is one part of the pay cycle. Bonuses are another.
39% of life sciences companies funded their bonus pool at 110% of target or more for the 2025 performance year, vs. 13% in technology. Fewer fell short of target, and almost all have a bonus program at all.
For life sciences leaders, funding at target is no better than the middle of the pack: half of life sciences companies funded above it.
Life sciences companies give new hires more of the refresh grant
Bonus pays for the year that just ended. Equity pays for the years ahead, starting with how companies treat new hires.
Employees hired shortly before a refresh cycle receive a larger share of the target refresh grant in life sciences. Hired within six months of the cycle, they are eligible for 72% of the target grant on average, vs. 42% in technology. At the median, a life sciences company grants the full amount at that point, while the median technology company grants half. Within three months of the cycle, neither industry gives much.
For a life sciences company that is hiring, that is part of the offer: new hires reach a first refresh grant closer to full value sooner.
Most life sciences companies don't set equity guidelines by job function
Refresh timing is one equity policy choice. Another is whether guidelines differ by job function.
60% of life sciences companies use a single guideline structure by level, with no differentiation by function. Few have separate ranges for technical or scientific roles. In technology, most companies (68%) have higher or separate ranges for technical and engineering roles.
Respondents could select more than one answer, so shares add up to more than 100%.
What this means for 2027
Across the five findings, life sciences companies pay more generously than technology companies in several places: they are raising the low end of merit budgets, funding bonus pools above target more often, and giving new hires more of the refresh grant. They also differentiate less, by performance and by job function.
For life sciences leaders, the right comparison group is other life sciences companies. Technology practices like separate equity guidelines for technical roles, or merit built around performance ratings and position in range, are less common in life sciences.
Pave is a world-class team committed to unlocking a labor market built on trust. Our mission is to build confidence in every compensation decision.
About the data: Pave Data Lab's 2027 compensation budgets and planning survey, conducted with Alpine Rewards, included 88 life sciences companies and 150 technology companies. Results are directional and describe the companies that responded.
