Getting rewarded for cost savings
Hi everyone,
I work for a real estate developer/investor. I’m not senior and my compensation includes a base salary and a year-end bonus, but no promote or deal-specific incentives.
I recently joined the firm, and we’re now looking at opportunities in my home country, where I have a strong network.
Current situation:
We’re evaluating a project where the broker is quoting the land at X million. However, the land is actually being sold by a major institutional owner, and I happen to know the person managing the sale (on the seller's side, not the broker). I’ve reached out directly and may be able to get information on a price the seller would be comfortable with—which could be at least 1 million lower than the broker’s quote. On top of that, we’re currently underwriting around 500k as a broker fee, which might also be saved if we deal directly.
So in total, we could be looking at 1.5 million in potential savings and possibly securing exclusivity thanks to my direct connection.
I’m fully aware that without the platform of this company, I wouldn’t have access to this opportunity—but at the same time, it’s also clear that my relationships and initiative may result in significant value creation for the firm.
My questions:
- What would be a reasonable way to be rewarded for this contribution? Should I expect 5%, 10%, 50%, 70% of the savings to be reflected in my bonus?
- Should I instead ask for promote participation or some form of direct interest in the deal?
- Looking ahead, I expect more situations like this to arise. Should I aim for a faster promotion and better bonus terms, or go straight to management and say: “I’m generating material value and would like to discuss promote or incentive participation”?
It is obviously still fully hypothetical at this stage, we're potentially not doing that deal.
Our market officer already said something like "amazing job, if this happens we must think about rewarding you"
Any guidance or thoughts would be greatly appreciated.
idk maybe asking for 500k doesnt sound too crazy since no broker fee + they still save $1mm which juices return by a lot. Maybe someone more senior could chime in?
This sounds like a conversation for you to have with your boss. But there's no way they're going to give an employee $500k for saving them $1.5M. His LP's need a cut of the savings too. And even if he could, he's going to pocket the lions share and give you the scraps.
I’m going to be honest with you—you are most likely not going to get anything directly. A good bonus, sure. A pat on the back, you bet. But you don’t get a cut of every dollar you save. That is simply not how the industry works.
I would honestly caution against even asking. Bring up your successes as often as you can, but asking for a cut will make you look like a goober.
facts, be very careful about straight up asking for a cut of the savings. Maybe there is a way to frame it in a way (with a lot of tact) that it will make them consider it, but odds are the best you will get is a pat on the back, bonus and for this to be mentioned during an annual review. You will also have to bring this up (again with tact) as an example of how you make yourself useful to the broader term/org/platform. This is life of a W2 employee. Please come back to this thread and follow up with what happens so it's helpful for others on here as well.
I'm not even making this up—at my former job we had an in-house construction ops guy who thought he deserved a cut of all hard cost savings and that the owners were selfishly hoarding all of those hard cost savings for themselves. He was an absolute moron for all sorts of reasons and we all made fun of him for this idea, including the owners.
Don't be that guy.
If I were you, I wouldn’t expect anything if you bring it up. Especially as an analyst, your bonus and salary are pretty much set. There’s not much you can do at most organizations (if you’re meeting standards) to get a high 5-6 figure payout. You’re expected to help the firm save money in any way you can. I personally would just leave it be.
Will take a shot on this with a shady approach:
This will also fly if you say "I know someone who knows them and could get it cheaper for us for a lower price", which means that the fee to be paid is up for sharing in your company.
You can't buy that land for your company and re-sell it because of taxes, especially when it's sold locally as property taxes are usually paid in the jurisdiction in which the land is set.
Truly sucks to be a junior and knowing that you made/saved so much money and will probably get only 5% of it, so I couldn't live with myself knowing that at least I tried to get a cut from this somehow - but that's just me.
Dolores ut quisquam commodi vitae. Sed sit ducimus ut voluptatum delectus est.
Culpa sed libero minus dolorum ex maiores. Neque et officia cumque nesciunt ipsam consequuntur ea voluptas. Totam quia accusamus qui atque. Modi laboriosam mollitia consectetur laboriosam.
Quas ullam dolorem et dolore eum est nostrum. Et distinctio sunt totam rem quia dolorem neque nisi. Et voluptates voluptas enim. Facilis eum animi accusantium quo sed. Eveniet quod molestiae cumque.
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...