So I just got hit with a new concept in my annual review. The firm I work at has had significant associate churn in the past year, and I guess they decided to implement bonus clawbacks. The rough mechanics are: When i signed my offer letter last year, they gave me a bonus range of $x to $y. Then in the review, they said, here's your "base bonus" ($x) and "premium bonus" ($y - $x). Accompanying this discussion was a letter acknowledging that if I left in the next 12 months, I had to pay back an amount up to the premium bonus if the fund requested it.
This seems significantly off-market for PE associate comp, no? I understand it at more senior levels (talent retention), etc. but 1) I've never heard of it for associates and 2) almost creates perverse incentives to leave the firm sooner (when bonuses are smaller in early years of career) to minimize the financial cost of leaving.
Any thoughts / advice / is this normal?
