Sign on bonus for PM positions at MMs
I was wondering whether MMs would be open to paying new PMs a sign-on bonus. It is absolutely clear to me that the economics of a PM gig are driven by the percentage of your PnL you are getting and that you are anyway moving to a high risk high reward role, but obviously people who move from another firm would give up the bonus they are potentially getting at year end plus any deferrals. Would be curious to hear if anyone here can say something about how common a sign on is. Would such a sign on be subject to a claw back clause in terms of the PM hitting the draw down limit in year 1? Thanks!
Very common for the situation you describe. Ultimately, if they want to hire you they’ll “make you whole” on the money you are leaving on the table. I’ve seen different structures (deferred, guaranteed bonus, etc) but it is a standard negotiating point.
Is there a good way to think about compensation for a new PM joining a MM? Can someone breakdown the various components i.e. signing bonus, base, % PnL, guaranteed pay to make whole from prior role, and any other component I missed? Thanks
Very common, clawbacks on 1 year of drawdown? Come on if they try to do that laugh at them.
Clawbacks occur usually around misrepresentation. They also occur if you go join Firm A, get sign-on and then quit two years in. These firms have no retention policies or minimal so if you quit two years in, its fair in their mind to give back the original "sign-on". Hope that makes sense.
How much sign on is typically expected for PMs? Any colors?
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