Anyone has experience. About to sign a contract, but there is a clawback option for the bonus if you do not complete your 2 years as an analyst.
Do companies really go after that? I mean, I could understand it when it comes to a signing bonus within the first 3 months but a full first years' bonus?
Also, what happens to your tax? Obv. you get some 60-70% of your bonus, do they expect you to pay back 100%?
Please enlighten me here monkeys of WSO.
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I've never see this before. A two-year clawback provision on an analyst's bonus is absurd. I would consider looking elsewhere as this may not be worth the headache.
Would love to but seems to be my only option atm.
Jefferies?
Jefferies have clawbacks on VP and up didn’t apply to juniors.
Wrong, at least in London
I heard that this applied to at least Associates as recently as two years ago. Not sure about Analysts.
Associate and above. Only if you leave for a competitor.
To OP: clawback on signing bonus is market. Never seen clawback on YE bonuses. Assume this is not a legitimate firm?
If it is clawed back, you pay the full, pre-tax amount. But come tax time, you will get a refund.
Contract states signing/relocation to be paid back in full (pre tax) amount
Not sure about yearly discretionary bonus
Signing/relocation full clawback isn’t unusual. Otherwise you could move to SF for free, and live off of signing for a few months until you find a new gig to mysteriously disappear from.
What if u get fired? Can they claw it back then?
Usually no, but depends on firm and what you are fired for. Most reasonable contract will (mostly for legal reasons) balance protecting you so you don’t get screwed (you move across the country and get fired, and company wants the money) and the company (you move across the country, take the money, and quit). But if you mean fired “for cause” (you punch your MD) vs laid off/cut due to budget then they can try and get that back, but usually will only go after large amounts.
Yes likely they will clawback unless you leave for a job where they don't want to upset you (e.g. you go to corp dev for a client after 1.5 years because you liked working with them on some deal in your first year)
You'll pay back 100%, and then the following April when you file your taxes you will get the tax that was withheld (~40%) on the bonus back in your refund. So you'll run a cash loss for the months in between
I would try to find something else. Or take it and try to lateral ASAP (ie first 6 months)
Thats the plan right now. Not sure if lateraling and Interviewing works that fast tho. So definitely a bit worried about that.
Why not tell us the bank so we get some helpful info as well?
As you’ve said this is your only option right now, you’re obviously going to sign the offer letter so what’s the actual point of the post?
Is clawback common at your level? No. But they probably know you have no leverage to push back.
Thought they already get enough hate on WSO.
Wasn't really sure if this is the standard and banks just do not use the option or if this is really a bad contract.
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Seems like an excessive clawback. For signing bonuses/relocation I think clawback is reasonable, but not at 2 years. From experience, a 1-year clawback with decreasing % owed each month feels fair. By 6-months, if you left you would only owe 50% (or however it was exactly done) if you left. Not that it's a deal breaker, but something to consider I guess
This is legal and enforceable if you sign it, and if they went to the effort to put it in there they'll likely go after you for it. I would not sign this, very unusual for an analyst
Clawback on anything other than signing bonus is not market.
Send it back to HR with a redline scratching out the provision. Provide them both with a redline copy of the contract along with a clean version with your signature accompanied with an email stating you made an amendment to the contract as shown in the redline version, and that there is a clean version attached as well with your signature if changes are agreeable. If you are getting a signing bonus, you could also just make an amendment to the contract to only be applicable to the signing bonus which would specify things if the contract is just overly vague as currently written.
This approach could play out a couple ways, they could not really care or notice and accept it, tell you they are not accepting the changes, or worst case scenario rescind your offer.
Help I did this and now some guy from InCloud is trying to contact me
Nice, sounds like there is room for negotiation.
How does a clawback even work? Do they go into your bank account and take the money?
They send you directions for where to send a check. If you don't send it by the time specified, they will send it to collections and it becomes a debt / affects your credit score. In some states collections can garnish your wages too.
TLDR; it's a pain in the ass don't sign any clawbacks and think they won't get enforced
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