I was wondering, if firms do layoffs within a month before bonus time, do folks still get paid their bonus? Specifically, for the big banks that are paying out their bonuses in January or early February, assuming there are job cuts, will these folks still get their bonuses (since they were "earned" in 2007)? I'm just wondering if anyone can comment from personal experience or anecdotes.
This seems like something that would be very circumstantial, or could vary from firm to firm. On one hand, I think the firms could suffer reputational or ethical damage if they sacked people a week before bonuses were expected to be paid, and didn't give them any compensation or separation payments. On the other hand, if the firm is really doing that badly, I guess nothing mandates them to pay anyone anything, given that the bonus is discretionary.
In some cases, I konw of people who got laid off a couple months in advance of bonus, but they still got what they thought would be equal to their '07 bonus as well as some severance pay. However, I also heard of one case where someone got let go a few days before bonuses and didn't get paid anything (though, I also heard that in this one case, it was performance-related).
I'm just wondering how this plays out in theory or in ethics, versus in practice. Let me know what you guys think.
they can completely shaft you if they want...ppl arent generally fired this close, but in oct/nov for sure.
Bonus is always completly discretionary, it is performance related which encompasses the bank, then team/geography/business unit (however the bank chooses to split it) followed by individual performance. The whole point is getting as close to bonus and then sacking you as they can to get maximum work and output for the least gross cost. Of course you get a packaged when you are sacked, but not your bonus.
Did you mean that individual performance is the least pressing concern among team, geography, business unit, etc. when it comes to layoffs? Just wondering -- I recognize that layoffs tend to be more structural in nature, but I would also think it's an opportunity to let go of weak performers anywhere in the bank...just my presumption, though...
I would think that, common sense would dictate if your team is doing well and generating revenue you should be ok. I heard at my old bank that anyone with a rank of xxx got sacked. But who knows, its all fairly nonsensical I think.
From what I've heard, they generally always pay you bonuses, unless you did something really bad to get fired.
investment banking is driven, above all else, by reputation. Ibanks do NOT want a reputation of letting go analysts without paying bonuses - they'd get reamed during recruiting season. Maintaining a strong analyst and associate class outweighs they 40k or so they'll have to give to laid-off individuals. I know a few people that were let go either due to downsizing or being a weak performer, and they all got bonuses. The only way you wouldn't get a bonus if you do something illegal IMO.
Reputation amongst perspective analysts ranks about #1,000 on the list things executives at investment banks care about. I suppose maybe a couple of your friends got lucky but I know many people who have been canned with no bonus.
The short answer is no. If you get laid off, you get no bonus. Even if you are laid off a week before numbers are rolled out. I'm sorry, but that's life in banking.
The reality is that severance levels are often set with respect to what point in the year you are let go. So the closer you are to bonus time, generally the more favorable firms will likely be in their termination packages. But you'll never get close, by a longshot, to what you would have made if you weren't let go.
What if your bonus hits your bank account in the morning, you're given notice in the afternoon, then your bonus is immediately reversed from your account? The layoff was completely unrelated to performance (long story, but this is a known fact), and the bank was clearly looking to f*ck you over. From a legal standpoint, I'd think you'd be entitled to that bonus since even at the time of bonus distribution, you were still an employee. Thoughts?
of course you dont get your bonus if they fire you. They are firing you to save money. Your bonus is totally discretionary, they dont "owe" you anything.
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