Problems/Blowback from Reneging + Offer Evaluation between Tier 3 vs. BB IB
All,
Need your help in evaluating my current situation. Recently received an opportunity to go to a BB (in a preferred vertical but not necessarily preferred location) but had only just accepted a Tier 3 IB offer just a couple months ago (in a preferred location and no industry/coverage assignment yet). The Tier 3 had recently also moved me from a regional location my preferred location as well.....Should I deal with the potential blowback from reneging as well as the hassle of returning sign-on? What is the process for returning a post-tax sign-on bonus anyway?
Would really appreciate your help.
If I understand correctly, your situation is the below:
- You have an opportunity to go to a Tier 1 BB, but not in the best location
- But you have accepted a Tier 2 IB offer in a good location
- You're currently in a Tier 3 bank which treated you well be relocating you to a preferred location (?)
Having gone through 1) reneging offers 2) jumping ship 3) getting caught by current employer that I've signed another contract etc (see my prev. post) etc. I can assure you that there is no real issues with reneging offers. People make it sound like you'll get sued by HR and potentially get blacklisted by every single company out there, but in reality nothing happens. HR gets pissed off, but so what? They don't know where you are going and they have better things to do than to ring other banks' HR team just to talk shit about some analyst. I guess these things become more relevant when you're a senior hire (say Director and above that's jumping ship - then reference checks etc. matters) but at your level literally nothing will happen. So, if you think that having a better name on your CV is the better way to go, definitely go ahead (there's a question on location vs. prestige, but that's entirely up to you anyways so I'll leave it)
On sign-ons, most likely you'll be contacted by the accounts team in the bank asking you to pay a certain amount back, citing some clause in your contract. You do have liability over this so you should pay, otherwise they will go to debt collectors (or equivalents) who will keep chasing you to pay. It's basically accounts receivables from their side.
Apologies for the confusion - only two banks are at play here. The more I think about it, the more I think the Tier 2 should be more like a Tier 30 (post 25 ranking on Vault/Firsthand), I just wasn't thorough in my edit. The Tier 3 bank is the one that has a preferred location (after they had agreed to transfer my location).
I certainly appreciate your insight on this.
I’m not 100% sure because I’ve only seen this scenario on Excel (I’ve never had someone we hired with a sign-on bonus renege) but from what I understand if you renege you have to give back the pre-tax amount. Again, I have just seen this play out in artificial Excel modelling from a corporate finance perspective so you should call someone more knowledgeable and ask about this.
If I’m right, you may be fucked because of the sign-on bonus. But again, confirm it yourself just in case. Good luck.
I reneged an offer so I can explain the bonus stuff. Also don’t feel bad about reneging - like the comment above, as long as you are professional there is nothing wrong with doing it and nobody gives a shit/doesn’t matter if that firm “blacklists” you because you’re almost certainly not going to try to work for them again.
When you reneg your HR will follow up to get the bonus back after you tell them. They will send some forms and you will wire them the money back. I’ve seen some threads about people saying they’ve ignored these requests and tried to keep the bonus - don’t do that shit, just send the money back and move on because ignoring it has the potential to cause a lot more problems.
If you return the money the same year you recieved it, essentially I cancels out on your tax forms. Your old employer COULD issue a revised W2 because taxes were already withheld (paid) when you recieved the bonus, but in reality they won’t do this because they don’t care about you anymore. Look it up on Google but there will be a way to claim it back when you do your taxes next year.
If you recieved the bonus in 2021 and are paying it back now in 2022, it’s different and kinda a pain in the ass. I am going to do it next week on my tax forms because that’s what I did in 2020/2021 - there’s a way to claim it back (TurboTax has a few articles about how to do it).
very helpful, thank you so much!
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