Signing Bonus Advice
Accepted an offer from a reputable investment bank, MM firm. Really excited about starting and am ecstatic. The only problem is, there was no signing bonus in the contract. Can I bring this up with the recruiter? How can I approach a question like this? They supposedly make a shit ton of money so I feel as though we should get one. Any advice would be great, thanks.
Offer was 70k, 2.5k relocation expense reimbursement
From my understanding this "relocation expense reimbursement" is what many would call a signing bonus. Might have some tax implications. I'm sure someone else can confirm or give details, although 2.5K seems a little low. Most reputable MM's are giving 5-10k.
Remember you get taxed on that 2.5K. They never tell you that.
Actually, the reimbursement is not subject to withholding because it is only reimbursement for actual expenses, if I read that correctly. A balloon payment of that amount would, indeed, be subject to withholding.
Either way, it's not a particularly generous policy.
In the early 1990s, when I was an analyst, I got a $4,000 sign-on plus relocation reimbursement not subject to a cap. Analysts ten years ago were getting $10,000 to sign, but no relo.
I found out when I filed for a reimbursement for my $10K moving allowance and they docked me at 35%.
I received $8,000 for relocation at the MM bank I work at, no signing bonus. And yes, your relocation bonus will definitely be taxed.
Yes, perhaps I wasn't being clear. If they hand you $2500, it is subject to witholding or subsequent tax (JPM for instance historically gave out the full gross amount, but would you'd pay the tax at year end).
If it is reimbursement for documented expenses, it is not subject to withholding but an item to be added on your tax return.
Seems low, as others have stated, but is it worth looking petty over? With such an uncertain job market it might be best to just let it go. If you really need the money in order to move, then maybe it's worth trying to negotiate for a higher amount but if it's solely so you can stroke your ego or have spending money, then I would think twice about it. Keep in mind there are considerable costs to moving, especially if you plan to live alone, such as deposits for rent, utilities, cable, etc.
You will need to buy a wardrobe, etc. so it is understandable that you want more money, but you may have an issue considering you already accepted. Hopefully someone else with a similar experience can weight in.
Are you a first year coming out of undergrad or are you a lateral hire from another bank/job?
Regards
coming out of undergrad. fresh analyst. I know it seems bad but I really think I should get a signing bonus that is comparable. their bonuses are BB street so they should give sign on right?
can we get more on topic of how I can approach HR about signing bonus, forget about relocation.
Thanks
That's me sorry ^^^^
Was on roommate's comp
The relocation is generally separate from signing. Signing is disbursed immediately after you accept the offer. Typical comp this year is:
70k (salary) + 5k (signing) + 5k (relocation)
This is all usually outlined in the contract. So, your bank may just be cheap-ing out, because they were virtually certain you would accept the offer. Did they ask about other offers, or anything like that? And, how did you respond?
If you've already signed the contract, I'm not sure they'll agree to pay you more. I don't think it would hurt to call HR, and ask whether there is a sign-on though.
Maybe ask another fellow incoming analyst?
A straight cash payment, regardless of costs incurred, will be taxable. A REIMBURSEMENT for actual incurred expenses will NOT be taxable.
Example: Jimmy accepts a job in Texas. His offer letter states he is to receive $10,000 at signing. $5,000 as a signing bonus and $5,000 to help cover moving expenses. All $10,000 is taxable.
Example #2: Jimmy accepts a job in California. His offer letter states he is to receive $10,000 at signing. $5,000 as a signing bonus and UP TO $5,000 reimbursement for moving expenses. He moves to California and incurs $3,500 of moving expenses, which he submits for reimbursement. All $3,500 is reimbursed and he pays no taxes on it. Jimmy is required to pay taxes on the $5,000.
There is one important nuance: The IRS allows you to take a tax deduction for relocation expenses that are NOT reimbursed (with some limitations -- consult a tax specialist). So, if you incur moving expenses due to employment change, you may be able to deduct those expenses from your total taxable income.
They knew I had other options... I think I'm going to call HR.
CompBanker you're not helping me. Just give me advice what I should do regarding the signing bonus.
ok thanks bro. i dont think im gonna call either. whatevs.
Ut qui et est eveniet. Sunt enim excepturi voluptatem eligendi sit sint culpa. Officia dolor optio dolore praesentium quas accusantium dolor commodi. Nostrum id fugiat quis asperiores. Enim corrupti sunt qui sed deserunt saepe. Esse cupiditate adipisci illo harum maxime adipisci.
Porro molestiae totam nihil non consequuntur. Quos fugit illo voluptate voluptatem in architecto nihil. Id dolore mollitia et quo cumque tempora. Dolor id incidunt fuga vel rerum qui sunt. Adipisci nihil fuga non iste. Hic qui repudiandae cumque nisi voluptatem dicta sunt est. Quo ut molestiae qui illo tenetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...