Bonus when leaving mid year

bean's picture
Rank: Senior Baboon | 214

Hey guys
When you leave a firm mid year, what is the norm for requesting your accumulated bonus? Do you ask you current firm for x number of months you worked or do you ask you new firm to cover the bonus your missing out on?? Or worse do you leave money on the table and suck it up bc of the better position your moving to??

Thanks

Comments (35)

May 30, 2012

Btw this is for AM not the usual BB IB analyst program
(experienced hire)

May 30, 2012

Why would they pay you a bonus?

May 30, 2012

Lol. Why pay a bonus? Typically your best bet is to get your future employer to give you that with signing bonus, but I wouldn't get hopes up.

May 30, 2012

No way your prior firm will pay. The new firm might give some signing bonus that could make up for this. Otherwise, I think you probably suck it up. I'm going through a similar process myself.

May 30, 2012

haha

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May 30, 2012
bean:

you leave money on the table and suck it up bc of the better position your moving to

For the most part, this is how it is. You pick one: your bonus or jump ship. Talk to the new place about the hit you're taking, they may or may not work with you.

May 30, 2012

The contract I just signed said you had to be employed with the firm on bonus day to get your bonus.

May 30, 2012

Yes, normally you have to stay through bonus day in order to receive your bonus. The only exception is that many firms (at least at bulge bracket banks) will allow analysts to leave at the end of their two-year program at the two year date and receive their bonus even if those are delayed.

So, for instance, if analysts at Bank X start in June, but bonuses get paid in August, first year analysts will have to stay at the bank for a year and two months to receive their first bonus. Second years can leave in June, provided they didn't sign up for a third year, and still receive their bonus in August when everyone else is paid.

Standard practice at the major private equity funds is to allow a new hire to wait for his bonus or to make him whole via signing bonus if the firm is looking to hire immediately.

May 30, 2012

You leave it on the table....it sucks but sacrifices

Eventus stultorum magister.

May 30, 2012

bump

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May 30, 2012

who cares, you will make tons of money in PE post-mba.

May 30, 2012

defer entry, go on vacation for 9 months

problem solved

next

May 30, 2012

Ask them about it.

May 30, 2012

Thanks, but does anyone out there know if there is somewhat of a standard procedure for this? Surely is must be somewhat common.

May 30, 2012

i am in banking - guy ahead of me was in the same situation (associate in levfin) - he was paid a pro-rated bonus. probably differs from firm to firm.

May 30, 2012

Does your firm want you to leave (as in, they have a 2 years and out program where all pre-MBA associates are expected to leave after 2 years)? If so, I can't imagine not giving you a pro-rated bonus. Or, were you given the option to be directly promoted? If so, I can imagine them being mad that you did not accept their offer and would try to disincentivize you from leaving.

May 30, 2012

It is not really a 2 and out program, but they have known for a while that I was planning to go to business school because I asked for recommendations a few months before I even applied. Since they knew that I was not planning to stay, the direct promotion discussion never really came up, but I feel like they would have liked me too. Overall I think they would like me to stay (its easier than having to go and hire someone new and pay a signing bonus and take the risk or whatever), but I wouldn't say they are mad that I'm leaving.

May 30, 2012

I imagine they'd give you a stub bonus or whatever. Doesn't make sense to give you nothing. Just talk to a manager type that you are close with and figure it out. I imagine there is a partner or principal that you are close with and have worked for a lot. Maybe one of the dudes that gave you a recommendation. They're not dumb and likely plan to pay you something. But, there's no reason not to discuss it with someone.

Best Response
May 30, 2012

The standard practice is to pay you a pro rata bonus for the months that you did work. However, you may not get paid this bonus until the standard bonus cycle, meaning, they might not pay you out until the following March. I agree with TheKing's recommendation to discuss it with someone sooner rather than later. Perhaps do it in conjunction with your discussion regarding your last day at the company.

    • 2
May 30, 2012

If you cannot push back the start of the position in the bad-ass group and you are SURE that the exit opps there are awesome and obtainable and that you won't really get anywhere out of your current group, take it. You've been getting crushed, but you gotta think long-term.

May 30, 2012

It's more than the $60-85k of accrued bonus you are leaving on the table. it is also two years of significantly lower salary.

How bad is your current group? Is it okay, or is it basically dying? Also, are we talking bb here or mm?

My gut says you should stay but I don't really have an idea for how bad it is at your current place. I mean, if you aren't getting any transactional experience, that might be a problem in more than one aspect.

May 30, 2012

NPV of Bad Ass > NPV of Bonus

May 30, 2012
SuitedWolf:

NPV of Bad Ass > NPV of Bonus

Succinct but convincing. I dig.

May 30, 2012

If youre looking at this in terms of exit ops, you really shouldnt consider the bonus figure. Here's why, if you get that "badass PE" gig and excel there, you will be making that amount in a month or two. If youre truly considering this on a long term basis, that is how you should view it.

BUT as mentioned 60k is alot to anyone 2 yrs outta school, and could pay off student loans. Like many have said above, we need more info on the current situation and the awesome group to make a more informed judgement.

May 30, 2012

I'm at one of the better know boutique firms (think Greenhill, Miller Buckfire, Houlihan Lokey, ). But I've been doing primarily creditor side work and not as attractive to PE positions I guess (no M&A, LBO experience)... considering I haven't had much luck.

Potential position could be comparable to M&A at CS or DB.

May 30, 2012

try to push the starting date at the BB out as far as you can. if that doesnt work quit and leave (some) money on the table. at your age/career stage its all about long term perspectives and earning possibilities and those are better at the BB/PE exit.

May 30, 2012

The start date is not flexible.

May 30, 2012

Little confused... are you an Analyst? Houlihan hasn't paid bonuses yet? (You said you do creditor work, I'm guessing Houlihan)

May 30, 2012

Hmm... thats a tough position to be in. Thats why it sucks being on a calendar year cycle.

You have to realize a few things:

1- can you find a comparable job/position after year end bonus? Deal flow is going to be through the roof right after Labor Day, so any banks that are on a hiring spree at the junior level will have completed this by then... meaning there likely won't be that much hiring in Q1-2011.

2- what are your prospects if you stay where you are? How does this translate to your long-term goals?

May 30, 2012

Im in a similar position.

Not a whole lot you can do, you just have to decide if you're ok taking the offer knowing that you'll leave nearly an entire year's bonus on the table.

I don't think any employer is going to pay you accrued bonus. One of the main purposes of a bonus is to keep you hostage throughout the year (i.e. retention). If employees leaving mid-year still go their bonus, no one would be incentivized to stick around.

May 30, 2012
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May 30, 2012