Negotiating Bonus Retention
Help - Looking for advice in respect to moving jobs and bonus retention
Situation - Currently an Associate with an Independent - Greenhill/Houlihan/Lazard/Moelis. At the start of this year was paid a good bonus - 100% of my base salary. However this year, the company introduced a retention clause into the bonus payment. 100% of the Total Amount needs to be paid if I leave within 8 months, 75% if I leave within 12 months.
I'm currently in advanced negotiations to join a BB - Deutsche/Goldman/UBS as a Vice President. Its a great opportunity, exciting team and will be another sound step in my career. I really want the role, however I don't want to repay last years bonus (75%), bearing in mind I received the bonus net of taxes. There is a possibility the BB may wait until my 12 months is up, however that means I loose any bonus for this year, I expect to be up for another sound bonus - our group has already hit our revenue targets for this year
Question
- Can I pressure the BB to payout the retention claim? or at least some form of signing bonus
- Has anyone heard of this or have any experience with this?
- Is there anyway the Independent would relax the retention claim - given its a competitor, not a PE role, I think its unlikely
- How does the tax situation work, can I repay the 75% net of taxes? Will the taxman refund the payment?
- The role was not through a recruiter, so they are probably saving ~10-15% of my starting base, figure that is some way to justify the BB paying the retention claim
- Really would appreciate hearing any war stories
My personal view is that retentions are unfair. I worked dam hard for that bonus in the prior year, they should not have the ability to claw it back and I will also loose any claim to a bonus this year
I'm a longtime user of this site, just using this profile for this question, please feel free to IM me
First question - was the policy implemented after you got the bonus? If so, you shouldn't have to repay. 2. Is this legal? I'm not 100% sure on that! unless you signed a contract that says so. 3. In finance there is definitely precedent of firms "buying you out" of bonuses. This would seem similar.
You may want to go straight to the hiring manager and just give them a run down. People are pretty understanding of these things.
I have no idea how bonuses have become a forward looking thing - world is a different place.
P.S. GS, DB, UBS are not equal
Depends where in the world you are. In Australia, UBS > GS > DB. That being said, assuming this is the US (esp. because of reference to HLHZ) - therefore valid point.
OP, I have heard of people moving between banks and the banks matching a lost bonus/unvested shares - but that's in Australia. Not sure about the US though.
Fair point...just figured it was US because of the boutique banks.
1st I have heard of the types of firms you mentioned bringing in the retention idea. I have a lot of knowledge of the buyout process, feel free to PM me for more.
It is perfectly normal to request that the firm bringing you in makes you whole. In this case, would argue they should pay both the clawback and this year's bonus.
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