EB offer start date before bonus

I'm a senior analyst at a boutique IB and have just received a senior analyst offer to join a top EB with a non-negotiable start date of 5th January.

At my current firm our bonuses are paid in January legit TWO f*cking weeks after the EB offer start date.

I want to accept but I don't want to have worked the past 12 months to miss out on my bonus by only 2 weeks which I expect to be around $100k.

I tried to push back the start date but they won't budge they said they need someone now as they're currently dying with so much work and the 5th January date is just to allow for our notice period.

At the same time I've been recruiting for the past 2 years to move to an EB and this has been the only offer I've received so I'm not confident I'd get another offer if I reject it.

I asked if they could pay out a sign-on bonus to make up for me losing my bonus but they said no and they have just paid their bonuses out so I'd have to wait the full year to get a bonus there.

Would appreciate any advice.

EDIT: one thing I forgot to mention is that although bonus is only two weeks after, pushing back the start date would mean a 6+ week push back due to my notice period i.e. I would have to resign after my bonus is received and my notice period would start then

Comments (23)

 
  • Investment Manager in HF - Other
Nov 20, 2020 - 2:45pm

Seems a bit crazy. Where do you ultimately want to end up? And is this comp tradeoff small enough where the longer term benefit makes sense?
 

Also, have you asked the new firm to cover your bonus? They should know that by leaving 2 weeks early you are leaving $100k on the table, I would expect them to do something about that if those two weeks are that important to them (and if so, how quickly do you think they'll be able to hire someone else?). 
 

Personally I wouldn't do it, but everyone has their own situation. Maybe if the opportunity was a huge change from where I currently am, but you should question a firm that won't do common sense things to work with you (over a reasonable amount of money) - that says a lot about the way they'll treat you. Every reputable firm I've worked with (or had friends work with) has been thoughtful in how to deal with potential lost compensation due to a move (large guarantee or signing bonus). These are more senior roles, but I would expect the same here. 

 
  • Analyst 3+ in IB - Ind
Nov 20, 2020 - 3:38pm

Thanks for the reply, ultimately I want to move buy-side so feel the EB will be better for me long-term.

I asked them about paying a sign-on bonus to make up for me missing out on my current firm's bonus but they said no.

They said it's important they get someone by then because they've currently got so many live deals on that the current analysts are working 18+ hour days including weekends and they've also been invited to pitch for a multi billion deal in January that none of the other analysts have the capacity for so need the support now and can't wait any longer otherwise they miss out on this pitch. They also said they interviewed other candidates at the same time as me so I need to let them know by Tuesday otherwise the offer will be given to the other candidate.

I really don't want to lose out on a $100k bonus even after tax it's literally enough to buy a Porsche (not that I would) but at the same time long-term I want to go buy-side and the EB will be better for me.

 
  • Investment Manager in HF - Other
Nov 20, 2020 - 4:05pm

If you want to go buy side why aren't you interviewing for those roles? If you are a senior analyst wouldn't it be the time to be doing that?

If this is a short term thing, and you think it significantly ups your odds at landing at the buy side firm you are interested in then it might be worth it. It is hard for me to know without knowing your situation (network, current firm, etc) 

As a longer term move I wouldn't go work for a place that is willing to have me walk away from my bonus without anything in return. Like I said, while I understand their situation (can find someone else, need someone now), it wouldn't be the culture I would want to be a part of. 
Unfortunately that's as helpful as I can be, it really becomes a tradeoff for you to consider (where will this lead, what are you giving up, how long will you be there, etc), but I would have thought you would be recruiting for buy side now.  

 
  • Analyst 3+ in IB - Ind
Nov 20, 2020 - 5:25pm

Thanks for the reply.

 

On your first point, I've unfortunately had no luck with buy-side recruiting, all the headhunters have tried to get me interviews but all funds reject me on the basis of not being at a top bank. The recruiters said they even try to personally recommend me over other candidates at BBs/EBs but the funds still choose to interview those candidates over me.

Do we really have that much bargaining power to ask to be bought out of our bonus as an analyst when we're so easily replaceable? I'd understand buying out bonuses for VP+ but is it really expected for them to do it also for analysts? Especially when they have other candidates willing to take the offer without any bonus issues. Maybe I should have been firmer when asking if it is standard practice to offer to buyout bonuses even at the analyst level.

 
  • Investment Manager in HF - Other
Nov 20, 2020 - 7:13pm

You definitely have less bargaining power as an analyst but reputable firms will still help out here. It is just a crappy move to have someone walk away from $100k. Throughout my career I've either been involved or have seen everything from $20k-$1.5MM (obviously the top end being senior people), early on in his career (analyst) my friend joining an AM firm was able to get ~$30k to cover his bonus because the firm wanted him to start earlier than the payout date. 
 

Like I said, if it opens doors that's something to consider, but the culture doesn't sound great. Again, I understand the business decisions behind this, but also know that $100k is a tiny tiny amount for most firms, if they want you and want you to be happy they'd pay up. As someone else said, you are a resource to just get stuff done for now. You may be using them the same way (a name to get to buy side) but just go into it with clarity on what this "relationship" is. 

 
  • Analyst 3+ in IB - Ind
Nov 20, 2020 - 8:14pm

Thank you, you've given really great advice.

Agreed in the bigger picture $100k is basically nothing to them especially with the strong pipeline. I guess a few possible reasons why they might be so against it, could be due to it possibly (A) having to come from the specific team's bonus allocation i.e. by me getting a sign-on it will mean the other analysts/associates would get given a slightly lower bonus? As the money would have had to come from somewhere but I'm not sure how these things work so this is just a guess. Or (B), maybe they are thinking from a risk management perspective i.e. 'what if we give this guy the sign-on and he ends up not meeting expectations and we need to fire and replace him with someone else'. Another possibility (C) could be they think they don't need to offer it as it's a step up for me i.e. cause I'm coming from a lower-tier bank maybe if I was coming from a BB or another EB they might have offered to payout the bonus. Or (D) it's just not part of their company policy to buyout junior bonuses.

I think I'm going to call on Monday and be clear and say I've had a think over the weekend and given how hard I've worked this year I'm not prepared to walk away from my bonus however I'd be prepared to accept the offer should you be willing to buy out the bonus. If they were to agree to the terms what percentage of my bonus would be a fair offer? I.e. would half of my bonus be a low ball offer or reasonable enough to accept?

 

 
  • Investment Manager in HF - Other
Nov 21, 2020 - 8:42am

You are right that the money has to come from somewhere, but it doesn't have to be from the analyst/associate pool. It can come from a number of places, if a team is working that many hours and has so many potential deals, then you would not only expect revenues to be up (if they land anything) but the firm should recognize this and allocate more budget to this team so that they don't lose out on the deal. That budget may include an extra $100k if the firm believes you are the right candidate that will get them to land these deals, or they can wait two weeks, not that hard. Only a sh*t place would take that money from the other team members. It'll come out of the very senior people's pockets, and that's a trade (as a person who has been in those shoes) that I would make any day (protect my team and take a small hit to my overall comp). 
 

As for risk, they should have a clawback if you leave and if you are fired for cause. If they just made a bad hire, much harder to enforce something like that, so yes, it is a risk they have to take. 

And they are probably taking advantage of the fact that they you are coming from a "worse" place. But more likely than that they just want someone to get stuff done, they are looking at this as a resource to just crush through work, not some long term hire, and they don't want to invest heavily in them. As someone else said, they chose you, so they prefer to have you, how much they'll give up depends on how large the gap is to the second person and how important they believe this role is.

I get not wanting to pay people wildly different amounts on the same team, so some amount of not giving too much in a salary negotiation (or anything) can make sense, but not when 2 weeks = $100k. 

As for what % to ask for that is personal (what you feel comfortable with). I wouldn't go below 50%, and would just continue recruiting for buy side and stay at your current firm. You are about to enter what sounds like a bad environment (lose out on 100k, work 100 hr weeks, and still try to break in to the buy side). 

 
  • Analyst 2 in IB - Ind
Nov 21, 2020 - 10:48am

I personally know a few people go to MM PE from non-bank, non-MBB backgrounds. Either you didn't try hard enough, targeted too high or HHs under-delivered.( what a shocker) Again, a lot of MM PEs don't even use HH, so problem might be on you.

Feel free to pm.

 
  • Analyst 1 in IB-M&A
Nov 20, 2020 - 4:07pm

Similar to the other commenter, everyone I know who has had situations like this with prestigious/reputable firms were able to get the firm to work with them, so it is a bit questionable, especially considering how the current analysts are being treated.

But at the end of the day, it seems like you already know the pros and cons, and you dont have much room to change the situation. Not sure exactly what advice you're looking for, but only you can be the judge on if it's worth it or not. Does your comp, excluding bonus you're losing, decrease at the EB? Also, how long are you planning to stay at the EB then? Personally, if I wanted to go buy-side, I would just go for buy-side positions directly instead of putting it off for a couple years, but we have different backgrounds/network so again, it is up to you to decide

 
  • Intern in IB-M&A
Nov 20, 2020 - 4:13pm

Skip. $100k is a lot and they are cheap for not respecting your bonus. You should be upfront about this and if they still don't bulge then it only shows that they don't respect you that much to begin with. 

 
Nov 20, 2020 - 4:26pm

Red flag.  Analysts are getting crushed 7 days a week, they need someone ASAP for a pitch, but aren't willing to budge on a bonus(meaning they just view you as a resource, nothing else)

 

Sounds like a garbage culture. Stay where you are at and recruit for  Bayside from there.

 

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  • Analyst 3+ in IB - Ind
Nov 20, 2020 - 5:32pm

Thanks for the reply, I do agree it sounds like a tough and intense culture but is the fact they need someone now and aren't willing to budge the case for every role? I.e. if they need someone now and have two equally capable candidates one is willing to join without a sign-on bonus and the one wants a sign-on bonus, it makes sense to higher the one that's cheaper? 

Especially when the sign-on bonus would have to come out of the team's own bonus allocation.

 
Nov 20, 2020 - 5:11pm

Dude just tell them to 1) make you whole on your bonus or 2) delay start date so you clip your bonus otherwise it's a no go. Assuming you have enough exp to find another similar opportunity a month from now, they're being cheap AND unreasonable

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  • Analyst 3+ in IB - Ind
Nov 20, 2020 - 5:29pm

Thanks for the comment. In your opinion, do you think even at the analyst level we have the bargaining power to be bought out of our bonus? Is it common practice to do so I didn't think banks would do it, maybe I should have been firmer when asking?

On your second point although my current firm's bonus is only a couple weeks after the start date, it would actually have to be 6-7 weeks push back due to my notice period that I would have to give after my bonus is received, i.e. if I give my notice period now there is no way my current firm will still give me a bonus. 

 
Nov 20, 2020 - 5:33pm

This makes more sense why they're fibbing. Just tell them you need a small monetary incentive $30-50K and see if they'll do it. If you're going from Ray Jay to EVR then bite the bullet even if they say no...

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Nov 20, 2020 - 5:34pm

It's way more common practice at Assoc level, analyst level I get why they're acting this way but they're really making you foot the bill unnecessarily. How cheap are they that they can't meet you half way?

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Nov 20, 2020 - 7:40pm

I'll play this game theory with you. They know that they hold the perceived bargaining chips which is why they are bullying you on all the details (no bonus, no flexibility, etc.).

IMO, they've decided you're the best candidate amongst people they've interviewed. They'd prefer you. Doubt they were super close with hiring someone else because how busy they are...they'd just give 2 offers. So not only do I think you have more leverage here than you think... You shouldn't compromise with how unreasonable they are being. It's totally fair to want to keep the $100k. There are other EBs you can keep interviewing for (a lot of hiring happens in the new year too). And all the while you can keep buyside interviewing. 

So if I were you, I'd tell them you need either the extension or a signing bonus and be 100% prepared to say no thanks if they don't budge. To what another poster has already said, if they are cranking on so many deals and need the help... the small amount of relative money they'd shell out for you shouldn't matter. Their statements about 18hr days and this complete inflexibility will be rough for you given the resentment you'll hold for having missed out on the bonus.

Two other points...

1) Think you mentioned 2 week notice concept? If you're leaving for another bank you'll have to quit and stop working same-day in most lateral bank moves.

2) Wouldn't surprise me given the specificity you've gone into that folks at the EB have seen this thread. Hope that doesn't negatively impact you.

 
  • Analyst 2 in IB-M&A
Nov 20, 2020 - 9:57pm

Don't do it man - 100k is a lot of money. Plus looks like you're going to get crushed anyways (which matters more than you think). 

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