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It might be more equitable to give bonuses based on individual performance, but that can also create a lot of problems. First of all, it requires extra effort as each employee would have to be judged according to some criteria to keep things fair. And there are bound to be resentments that result. It just causes less friction to dispense bonuses based on the company's performance.
I don't think it's fair, necessarily, but I kind of get it. I just wonder if it affects executives and members of leadership the same way…
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The idea is that collectively the company did well.
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But your annual salary increase is dependent on your work and not company profits