Post-MBA Associates: Bonus Clawback/Cash Questions
Hi all,
I am a current MBA student on the west coast, and I will be interning at a boutique bank this summer in San Francisco. I was hoping to receive some help from everyone, and I thank you all in advance for your help.
I hope this does not anger people, but due to family reasons, I do not see myself working as a Post-MBA banker for more than 1 or 2 years...my parents are aging, my kids are growing, and this is an easy way for me to pay off my degree.
1) The signing bonus received at the end of the summer, is there a minimum clawback / work period for that? I should hit the full-time desk in June of 2021.
2) The year-end stub bonus, and the year-end A1 bonus (after first full year), are there clawbacks on those?
3) Do boutique banks usually do full cash bonuses, or vested stock?
Thank you everyone, I really appreciate it. These factors play into whether or not I want to target tech recruiting in the longer term, and just start off there.
I hope you are all safe.
-WestCoastBear
Every bank is a little different. From a top MM.
Sign on clawback is 12 months. No monthly / quarterly stepdowns. If you leave 1 month in, or 11 months in, you still owe full gross amount (I’m sure you can work something out though).
YE bonus clawback only occurs when you leave for a competitor. If you leave for PE / Corp Dev / etc, you owe nothing. Let’s assume you leave after 2.5 years on a 3 year vesting schedule (stub, AS1 and AS2 bonus):
Stub: $50k -> after 2 years you owe $16k AS1: $150k -> after 1 year you owe $100k AS2: $200k -> after 0 years you owe $200k
So after 2.5 years, if you go to a competitor, you owe $316k. Your net bonus pay is roughly $272k (32% all-in tax rate).
I think my bank is one of the tougher on clawbacks, but it sure as hell is going to keep me from jumping to another bank