Would you rather take a role that has a 50% higher base salary or would you have 50% higher total comp? Let's say both are buyside roles, all else held equal.
Example 1:
150K base, 50k bonus, $200k all in
Example 2:
100K base, 200K bonus paid all at once at end of year (50% Cash 50% equity), $300K all in.
Let's hear it....
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What? Obviously higher TC?
Assuming (and it’s industry standard, so not a stretch) you end up at or around your target bonus, why wouldn’t you take the role with higher total comp?
A dollar of base goes just as far as a dollar of bonus.
The only reason I could see someone wanting higher base is for things like mortgage applications where your bonus may or not be considered at all or in full.
true but even for those applications, if you have a two year track record, from what I've heard it can be considered in full
Yes heard about this but also heard that it's a limited number of places that do this and some will not accept the full amount for variable/discretionary bonuses. E.g. they may take only 50% as guaranteed income.
Would definitely rather make $300k than $200k
You left out one key factor: are you assuming guaranteed comp for both examples? If so, that's quite the gusto you have! And if it is guaranteed, why wouldn't anyone take option two? Tough it for one year to bank your bank, and then if it's still guaranteed total comp on-going, live long and prosper.
Here in reality, I'd take guaranteed base for quality of life and work life balance I'd get back not chasing total comp. Maybe if it was my first few years into the career I'd go total comp and then switch over as soon as I met someone I'd want to start a family with and need some security for.
Good point, only the base guaranteed in both.
On target performance for the bonuses/equity to kick in
Your bonus in Example 2 would have to fall 50% to be in-line with the TC in Example 1. Much more upside than downside. Example 2 is the no-brainer (but if you have two offers I would leverage the higher base option to drive the same for Example 2, if possible). $300k is 50% more than $200k… given the materiality of the delta, this shouldn’t even be a real discussion. Cheers.
Don’t understand why this is even a question. Absolute dollars rules all, so higher TC. If both were equal and guaranteed - obviously then I’ll take the higher base because time value bruh.
Would you rather have a bigger penis (all in) or a bigger penis (when flaccid)
it all makes sense now, grower >>> shower
on the face of it, obviously two. but in my experience, you'd get your pants pulled down on bonus some way or another and both would end up being 200k all in.
Thing is that could happen with the bonus in option 1 as well right? Which could mean it wont total out to $200k all in.
Also would love further insight on this, my understanding was generally if you dont get your full bonus you likely wont have a future with that firm for too long
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