Leaving SM to join new pod - signing bonus ask?
I’m an analyst at a large-ish SM, and I have an offer to join a new pod at MLP. I’m inclined to take it, since I think I’m somewhat materially underpaid at my current seat.
The way the various non-competes line up however, we wouldn’t be able to start investing at the new pod until around October 1 of this year, so likely wouldn’t generate any material P&L for a bonus pool this year either. (I have a shorter non-compete, but the PM’s runs until then). As result, if I go, the I’d be working without a bonus for 2024.
My understanding is that there is some ability to ask the platform for a signing bonus or something similar (by another name perhaps) to compensate for this and make the hit less financially onerous in the short term. How does this work? And how much can I realistically ask for without being “greedy”? The same amount as my 2023 bonus roughly? More? Less?
Assuming the pod offers less stability/duration than your current seat, I'd ask for 2x your current comp as a guarantee (unless you're in a position of weakness and moving anyways, then would just ask to match last year's comp).
Thanks. My current seat is very safe (will be very surprising when/if I leave), and I have a couple other options, so it’s not a desperation move. Rather just a combination of comp and fund style dictating the move.
Is that really an amount that MM pods will pay out to an analyst as a signing bonus? It would come to about $1.3M for me, and I presume they need to pay the PM some guarantee as well.
How are such bonuses structured? Are they via deferred payments or is it a true up-front check?
Asking for the same bonus you got in 2023 to be guaranteed for 2024 is fair game. And don't lie: they will likely ask you for proof.
As for guarantees beyond that, it's more of a push. You can ask, but 50-50 that you get it.
I mean if its less than that, does it really make sense to leave? Leaving a SM that is very stable with a bonus of $650k and other options lined up for a pod with a new PM? Id want a significant premium for the risk your taking there. If you dont get paid your first year and you would have made $700k or so then you need $1.4M in 2025 just to make the same as your current seat. I would want at least $1M to sign.
What should he ask for if his current seat is not stable?
I've been on both sides of this at this point in my career.
-Its illegal in pretty much every state to ask for proof. MLP has to have lawyers and strict enough compliance that they have hammered that into people.
-That being said, I was super impressed with a candidate that asked for a certain year 1 guarantee, his comp sounded high relative to the role. He said "I know you can't ask me how much I make now, but here is 3 years of W2s/statements if you want proof".
You already have a good seat - what is the downside in asking? Don't be ludicrous about it (i.e. $5M), but you can let them know there is a high opportunity cost and you have high conviction ideas for 2024 that you think will make you a lot of money.
Well, they’d be 2025 ideas really, since the PM has a non-compete through end of September, so we can’t really invest until then.
But yeah, I’m fairly inclined to make this move. I just don’t want to do it in a way that’s financially ruinous. Trying to find a find a reasonable ask.
Surprised about some of the answers here. From experience your leverage as ANL is pretty low (unless having run money before and/or you are referring to your deferred) and part of your PM's task to cover any guarantee.
How does the PM cover it? Out of their own guarantee?
This is not true when moving from a big SM to an MM. You think a guy from Elliott who got paid 7figs previous year is not getting at least $1m guaranteed? I use Elliott as an example here but you can swap that with whatever large SM fund.
Haha analysts at Elliott are not making 7 figs…
I don’t have an actual data point from Elliott but I know many large SMs that pay “analysts” (I use that as a catch all term for anyone who’s not PM) 7figs.
Asking for $1 million guarantee is fine. I've seen some fine but not amazing guys get that after 2-3 years in the biz
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