Adobe (ADBE) Tightens Executive Pay as Analysts Cut Rating

Adobe Inc. (NASDAQ:ADBE) is one of the best cheap stocks to buy for 2026. On January 27, Adobe Inc.’s (NASDAQ:ADBE) board-level Executive Compensation Committee approved three linked initiatives governing how senior leaders will be paid over the coming years. One was a three-year Performance Share Program rewarding stock performance and sales growth, and the other was an annual cash bonus plan tied to revenue and profit targets. The last initiative was a new policy capping severance payments, and all are effective for fiscal year 2026.

The 2026 Performance Share Program establishes a three-year measurement cycle running through 2028. It determines equity payouts based equally on two metrics: how Adobe’s shareholder returns stack up against the NASDAQ-100 index, and whether the company hits predetermined annualized recurring revenue (ARR) growth targets labeled as “Net New Sales.”

For annual cash incentives, the 2026 Executive Annual Incentive Plan requires the company to reach at least 95 percent of its stated revenue and earnings-per-share targets before any bonuses are activated. The ceiling is set at 155% of an executive’s target award amount. And the new severance policy restricts cash termination payments to 2.99 times an executive’s base salary plus target annual bonus for any new employment agreements or amendments entered into after January 26, 2026. This is unless shareholders specifically ratify more generous terms.

In a different update, on January 12, Goldman Sachs downgraded Adobe’s stock rating from Buy to Sell and set a price target of $290.00. This marks the bank’s first coverage of the company under its new stance. The new Sell rating and target were based in part on Goldman’s valuation methodology, which applies a 15× price-to-earnings multiple to Adobe’s forward earnings estimates.

Adobe Inc. (NASDAQ:ADBE) develops software products and services for digital media creation, marketing, and document management. Its portfolio includes Photoshop, Illustrator, Premiere Pro, Acrobat, and the Adobe Experience Cloud.

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Disclosure: None. This article is originally published at Insider Monkey.