PE Offer / Timing Issues with Bonus Payout

I'm currently an ASO1 at an EB and Associate year end is 12/31. I recently received a PE offer with a date set for an immediate start, but I informed them I wanted to wait to get my bonus (could be anywhere from end of Jan to end of Feb). My current firm's policy is you must be employed through the date of bonus payment to receive your bonus, but the start date I negotiated with the PE firm was Feb 1. I have a fair bit of loans and don't want to leave that much money on the table for a difference of a couple of weeks (best guess is bonuses will be paid mid February based on historical data). The new offer is definitely a pay cut but did come with carry and clear opportunities within the firm, but still finding it hard to leave ~$100k after taxes when I'm this close. 

I have a good relationship with my MD, and expect he will appreciate if I were to come forward and inform him of plans to leave several months in advance as opposed to doing so on the day of. It is a small group, and one person leaving definitely makes an impact especially above the analyst level. That said, it leaves a level of uncertainty and I don't know if he would have the ability to overcome firm payout policy (albeit analysts who have finished their second year and left still get paid out on their bonuses, even though they are no longer employed by the firm). 
 

Any recommendations on how to handle / has anyone been in this position before? The firm I'm joining seemed slightly aggravated as it was that I pushed the start date back, and I'm hesitant to do it again especially given that I can't be certain when payouts are but will do so if I need to - unfortunately this would likely not be until January or so when we get an understanding for payout dates (any chance they'd rescind the offer if I asked for a couple of more weeks then?). 

Comments (11)

  • Analyst 2 in IB - Cov
Sep 20, 2022 - 9:34pm

Just did this exact same thing as a newly promoted Associate 1 at a BB. Signed my PE offer and kept it quiet for 6 months to clip the bonus, gave notice the day my check cleared. Under no circumstances do you tell anyone at work until that money is in your account and cleared of processing. Your boss will understand - it's the nature of the business, and especially when you explain that you're going to PE and not a competitor, they will understand. Not to mention, you just flipped from subordinate to client for them - they'd much rather that than you bailing for another bank. In closing, congrats on the offer - lock it down and don't tell a soul until Feb.

  • Associate 3 in IB-M&A
Sep 20, 2022 - 10:22pm

Absolutely do not tell them. You will at minimum get a healthy haircut on bonus, and at worse get no bonus. A second year analyst who is finishing the 2-yr contract with the bank is a lot different than an associate leaving.

Also, unless the PE firm is willing to buy out your bonus (which you can offer to them if they're annoyed about timing), they know you're not walking away from that. Highly unlikely they'd rescind over a small difference in timing, it'd take weeks to months to replace you. Do communicate the payout date and implied start date when you get it - unlikely it'd actually be a few weeks later than historical, more like few days, no? Don't leave or tell your current firm until the bonus fully clears your account.

Most Helpful
Sep 20, 2022 - 10:30pm
CompBanker, what's your opinion? Comment below:

I hate to say it but you'd be shocked at how fast your colleagues can turn from friend to foe when you leave. Even if you're telling them in the spirit of: "I'm letting you know so I don't leave you hanging, I could have just told you last minute and walked out." Generally it doesn't matter…

That said, there is an alternative. If you think that your firm would be royally screwed without you and need you around to execute a key deal … then you potentially have some leverage. It comes with a substantial amount of risk, but you can tell them you've accepted another position but are willing to stick around to finish executing a deal or ensuring an orderly transition of your responsibilities. The catch is: You'll only agree to do these things if you're paid your full bonus, otherwise you're walking out the door the next day and joining the new firm ASAP (because there is no way you're working the current job for just the base salary). However, if you're just a generic ASO1 at a fully staffed up EB, this probably isn't the case. 

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 5
Sep 22, 2022 - 4:53am
apple red, what's your opinion? Comment below:

Use your 15 days vacation leave at that PE firm and get the first 15 days off (so essentially you will be postponing your start date from 1st Feb to 15th Feb). During this 15-day "vacation" you keep working at your current bank and get that bonus.

  • Associate 3 in PE - Growth
Sep 22, 2022 - 8:51am

Congrats on the new gig OP, is this something new or did you not think about it when you agreed to a start date? You probably should have been aware of this dynamic, explained it to your new employer and taken a hard stance on a late Feb start date.

That said, if your new employer actually sees you as someone they want to hang around (and based on you getting carry it would seem they do), then this shouldn't be that big of a deal. If you have a 5 year tenure, pushing back the start date by 2 weeks isn't a crazy request since that's <1% of your total weeks with the firm. If you were a 2-3 years and out hire (really just a grunt) then they probably see you as interchangeable and those 2 weeks would be a major inconvenience to them. So you should find out EXACTLY when bonuses are paid out and coordinate your schedule accordingly.

Once you have that lined out, you should take off those 2 weeks off leading into the bonus. May look a little suspicious but if you don't have any other signs of leaving then they're not going to change your bonus that late in the cycle. Give yourself a little celebratory vacation, clear your head and give yourself the opportunity to hit the ground running at the new shop.

Sep 22, 2022 - 10:41am
armadillo999, what's your opinion? Comment below:

I'd push back the start date at the PE firm to March 1 - even though it's harder, it's the ideal outcome. Otherwise, offer to anticipate the start date to October 1 and ask for a signing bonus of $30k. And as soon as the bonus hit your account, give your notice to the current employer.

Sep 22, 2022 - 1:45pm
mrharveyspecter, what's your opinion? Comment below:

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