IBD Bonuses on Offer Letter
I was wondering if anyone could shed some light as to how bonus/bonus potential is expressed on an investment banking analyst full-time offer letter. Do they openly state the range of bonuses (eg. 25K-50K depending on performance) or do they express it as a bonus potential up to X% of your base salary?
Thanks for the insight.
They say something to the effect of "you may receive a discretionary award based on blah blah blah." They're not going to chain themselves to a certain % in a contract just in case you happen to suck or the market reverses. That offer paper is airtight.
Thats really interesting. Is it pretty uncommon for there to be a minimum guaranteed bonus for a first year analyst? Thanks for the insight, I appreciate it.
You're welcome, and in my experience the big guys (BB / EB) typically have a minimum first year bonus, but it's not usually disclosed on the offer letter. Like I said, it's usually tentatively decided by your bucket, your group's performance (sometimes not relevant for analysts), and the firm's performance - understandably your firm doesn't know any of this when they hand you an offer. It's a way to hedge out tail risk on both sides (if the market does poorly or everyone pays out the ass because everyone is leaving for Google / McK).
I don't have the perspective of a large IB but no one guarantees a bonus or we'd just make it salary or deferred comp based on how long you stay. All of our offer letters just say up to X% based on all of the bs factors, including personal performance but also including market conditions, overall firm performance and if an asteroid strikes Bangor. I usually tell offers that if they, and especially we, do very well it's not a cap but I also have worked at smaller firms where we can be more flexible. And it's an honest statement: we've written up to 100% but that person rocked and we had a banner year so we gave them far more than 100%.
"Minimum" bonus in offer letter (Originally Posted: 11/17/2010)
Just curious, I don't have an offer from a big shop to compare, but do your offer letters state a minimum bonus so long as you're an active employee of the organization?
Yes. My offer letter states my minimum bonus as $0.
Really Comp your lucky....mine said that they reserve the right to suck out my soul......as an added Bonus
Comp, mine says they reserve the right to rescind if I turn out to be a total bro... looks like this guy got a sweet deal...
Props for the $0... that shit was funny
nope.. does yours??
Yeah, had one with a minimum bonus amount. Just wanted to see if this was standard practice or not.
I've seen "Projected Bonus" a couple times but never a guaranteed minimum
Care to disclose what the amount is?
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