No bonus/payrise despite good year
Using a throwaway account.
So I work at a small capital markets boutique that I joined a bit over a third of the way through it's financial year. It was written in my contract when my first salary review and bonus date would be (relating to the finished financial year) and by payout time I've been there for a fair bit of time.
The firm has had a very good year, we've worked on more transactions than ever so revenues are probably be the biggest they've ever been. I personally worked on a couple of significant transactions that brought in considerable fees to the firm. It was a very small team so my responsibilities (and hence contribution) was quite significant. I'm not going to pretend that I've done everything right without mistakes but overall I think it was a decent year. I put in the hours, missed out on a fair bit of life outside work but all in the hopes that I would be rightfully rewarded.
Yet as payroll day is nearly here, the CEO, who does all pay rise/bonus conversations, is away and I have not had mine yet. Meaning that there is no way to discuss my compensation before payday rolls around. Bonuses generally are paid at our firm (as is standard in this industry).
A lot of people have had their conversations about this already, but quite a few have not. And this includes people who have put in a lot of very hard work and earned the company a lot of fees. Some of the junior analysts who had their conversations reported that it was a very lean year.
The unique thing about my firm is that it is owner managed: the CEO is also the controlling shareholder so anything he saves from paying his employees he can pocket himself. Some time ago a couple MDs quit to set up their own shop, allegedly because they felt they were not being compensated appropriately.
Ignoring the remote possibility that I get a nice surprise in my bank account on pay day, I'm probably not getting either a bonus or a pay rise this year so I'd be stuck on the same salary for a whole additional year. Although I do have some high fee projects in the pipeline that are likely to close, then holding out for another year to see if maybe I'll be recognized for those seems a bit of a risky proposal.
What would you do in such a situation? Stick it out, ask what happened, find a better job....?
Smile say thank you and find a new job while continuing to work hard at your current.
Then if they ask why you left, explain.
Definitely try and talk to him about it if possible. But if he has historically been stingy, then he probably still is. I would start looking for lateral opportunities where you will likely make more money. It's one thing to not get a bonus, but not giving you a raise (even if its ~3%) is seriously ridiculous.
Ya get the fuck out as soon as you can haha.
I'd always advise caution when approaching your boss / firm about compensation when you are planning on telling them you're not happy - particularly when you know it's a firm culture thing and not individual specific (i.e. it ain't changing).
If you do that, then they know you are likely looking elsewhere and are likely to leave. That means they need to hire someone and fill that position - if that wheel gets rolling too fast and they get someone new who is willing to grind it out and you're still hanging around looking for a pay raise you may get laid off and be looking for a new job w/ no job - that is the worst thing. Believe me.
You know it's a cultural thing, so just accept that and look for a new job.
I wouldn't hold out hope or want to work in an environment where the compensation for your hard work is dismissed.
I know the feeling...not getting what you deserved is something we've all felt. It sucks. But how you handle that feeling is really important, especially early in your career.
Here's my advice: you should probably stick around for a while and not say anything. My reasoning? Well, it starts with my hope for you that this isn't the best job you'll ever have. You probably aren't hitting your life peak in this job. Everything you do now should be geared toward the future...what actions can you take that maximize your ability to gain experience and improve your brand? In the long run, you're probably best off having a wealth of great experience & a good personal brand that will help you when truly bigger and better opportunities arise. Being prepared to capitalize on those opportunities is where the real money is...making an extra few grand in your twenties or early thirties is not the real money.
To me, it sounds like your current job is a great learning environment. You get to work on small teams, so you have real responsibility and are having a real impact. My guess is that you learned a lot in the past year and are continuing to do so. Based on your post's tone, it doesn't sound like you hate the actual work. To me, it sounds like you're growing in exactly the right ways for this point in your career.
Depending on how much money we're talking about, fine, maybe you can think about switching firms. But, if you do initiate a job search...please don't settle for a place that you think will fix this bonus compensation issue, but will screw up your ability to gain good experience. It would really suck to wind up at a place where you pocket some extra cash but your learning goes to hell.
Thanks for the thorough reply. Yes the role otherwise is great, I enjoy what I do, I'm getting excellent experience and lots of responsibility. I'm on the phone to the CEO/CFO of one of the largest property developers in the country almost daily, amazing exposure to senior people. Proof of this was when we were trying to hire some new people and had someone with 2 years experience at a top BB come in for an interview and they were not invited to the 2nd round as they had gotten almost no experience in that role
But I just feel that someone doing my exact role at a different firm would be paid more for it.
As you've brought this topic up of moving jobs for experience: for someone coming from a very small boutique where I get a very wide range of exposure, what would be the best next step? Bulge bracket, Mid market, another boutique, maybe even the buy side?
I started my career off at a "no-name" boutique IB that paid me $60,000 all-in. It was pretty depressing when my friends at larger bank were making almost three times what I was, but I knew that the only way to change my situation would be to lateral. There will always be people who desperately need IB or capital markets experience, so these firms can get away with underpaying. If you complain about your salary or even raise the issue, you will be replaced. I would start looking for another spot ASAP and take a look at IB that I was at, I too considered telling them how low the pay was, but I am happy that I did not because I ended up needing my MD's reference for my next IB gig as well as the corporate development role that I am in now. Always be professional and act as if you will be coming back into work at the same place the next day.
Sil making a strong case for member of the year... voting to start soon monkeys!
Thanks for the tip on the exit conversation. If and when I have mine, I was considering mentioning this point but I understand the burn no bridges suggestion.
burning bridges builds character
Get networking, most firms recognize that paying market is kind of a big deal. If you're not valued then you need to find a new firm, truth is you can get great experience at BBs, EBs or MMs.
I'm confused as to why just because the CEO is out of town it cannot be addressed when he comes back. Something doesn't add up here and it kinda seems like you are being a tad bit paranoid. As you said some but not all have had meetings. If you were the only outlier that would be different. It would just be shocking of a whole batch of people didn't have some sort of year end review.
No bonus or pay raise? Hopefully this isn't in NYC, where is it?
You know whats at work here? Its shit tectonics. When two shit plates strike and come together under incredible pressure, what happens Bubbs? Shit-quake
well since you don't yet know where you landed, it is much too early to take drastic action so keep at it as per usual until you do know. if you end up being disappointed and not compensated fairly then, as someone said earlier, keep a smile on and keep working while you find another job. good luck.
I was just made a rather clever offer by the CEO: got a small inflationary pay rise, zero bonus, but said that he'll re-assess things in a few months time. Not sure if that's when I hit proper pay dirt (by then should have closed a couple of high fee transactions so got things I could use to argue in my favour) or I will be disappointed yet again but for the time being I'm willing to see what happens.
A career mentor told me once, very simply put, it's not worth being at a place where your boss doesn't pull you up. Over the year(s), you can kinda' tell if he/she is "pulling you up" or not in various ways. If you feel your boss pulled you up they'll probably take care of your bonus.
Else, you're just not "in the club". Never worth being at a place where you have no entry into the club for long term.
Is this your first job out of undergrad? If not how long have you been working for? How long have you been with this company?
No it is not my first job. Started off with 3 years at a Big Four, then went into IB. Been at it for a bit under a year.
Thanks this is helpful context. Just my advice, given that this is your first IB role I would focus primarily on learning and getting the skill set that will position you well for the future and secondly on comp (you will have the opportunity to take care of this). If you had other IB experience, would be an easy sell to leave now and in interviews mention how you took this role on to have a more entrepreneurial opportunity at a smaller shop, worked and learned a ton but role wasn't structured for you to be compensated appropriately.
Breaking into IB from other industries isn't easy nowadays, so my advice would be to stick around to the 1.5 year mark or so, get some more great experiences under your belt (and a bigger role in these transactions than you would have at a big shop given the lean deal teams) and then start recruiting with other IBs.
Other posters may disagree with me but if I am looking at your resume now, the story doesn't jive as well given you haven't had another IB comparison and only 9 months here without a point of reference to compare "not being treated well to." I think the story just reads a lot better once you've put 1.5yrs or so in and focus on telling the story of wanting to go to a bigger shop and be part of a full service banking platform, see a greater variety of transactions, work across the organization on deal teams w. different product partners, etc.
When is your boss going to be back in to find out your numbers?
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