No bonus because I've been at firm for less than 1 year???

I recently graduated with a master's in financial engineering degree from a top school. I got an offer as a quantitative analyst at a well-known agency broker, and accepted their offer of 100k base salary + 5k starting bonus + "discretionary bonus." Looking at WSO and glassdoor, it seemed like this bonus was going to be around 25k, and I didn't bother asking about it when I was negotiating--this was a big mistake, I was very naive and young, and regret it. I assumed that the bonus would be reasonable, because why not? It was a reputable firm and I trusted that they would give me a fair bonus.

I just had my performance review and inquired about the bonus. My manager told me that I would get a "token bonus" (which I think is a euphemism for almost nothing) because I've worked at the firm for under a year. This is despite the fact that I got an excellent performance review. I said that I was expecting a real bonus, and he said he would "look to see" if I could either get a raise or an actual bonus. He conceded that my peers, who have worked in my group for over a year, will get a reasonable bonus.

Now, nowhere in my contract does it say that working at the firm for under a year means I will get a "token bonus" instead of a real bonus. But, the contract does say that the bonus is "discretionary." I thought that most financial firms say their bonus is "discretionary" because they don't know their upcoming earnings, or the performance of the employees. But given that my company did well this year and that I got a good performance review, I believe that my bonus should be in the range indicated on WSO and glassdoor. I was depending on a large bonus, given the relatively small size of the base salary.

My question is, does the word "discretionary" legally include this stipulation that you have to work at the firm for at least a year to get an actual bonus? I believe that if I had known this in advance, I would have negotiated more aggressively with my offer.

I'm confused about what I should do if my boss doesn't end up giving me either a raise or the bonus I feel I deserve. I think I was duped because I didn't know about this "under one year" rule in advance. Should I talk with HR and use this as my case? Or am I just fucked? Either way, I learned a valuable lesson for the future.

TLDR: I had no prior knowledge from my offer contract that working at my firm for under a year meant you get a tiny bonus, even if the company does well and you get a good performance review. What are my options for getting the bonus I feel I deserve?

 

Less than a year as in since July or so? I'm not sure how it works at your firm but at many firms you get a stub bonus for the amount of time you have been there when it is less than one year...assuming it isn't but if your bonus is around half what you expect and you have been there since July or so that's probably right on the money

 
Best Response

How much revenue can you point to and say "that came from my efforts"?

Bonus gets paid to those who generate revenue.

Going into a performance review and putting your revenue contribution number and a bonus expectation amount on the table is something you need to do as standard. I prepare slides with nice graphics for this each performance review.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

Usually you don't get a full bonus if you worked under a year unless you were poached from competition and negociated it upfront.

Standard practice is to recieve pro-rata bonus depending on the % of the year you worked. However if since you joined you spent 1 month in training, then 1 month getting used to the systems, and 1 month scratching your balls, it's not like you contributed that much to revenue. So if they decide to throw you under the bus it's hard to argue.

 

Discretionary bonus is exactly what it is--it's up to your boss/firm's discretion on what they can award you, which doesn't have to match up with the WSO/Glassdoor system.

Unless you can point to a % revenue/PnL it'll be hard to make a strong case for deserving more.

 

as blender said, a discretionary bonus is exactly what it sounds like. and in my opinion if to date you've had shitty performance, it may be in ur best interests to not address it because you could bring it to the attention of parnters or higher ups that Ur performance has been sub-par and this could result in your termination.

 

Are your programs making money or reducing costs? Like the guys above said, being able to point to an actual number is important when discussing compensation. Look at it from your boss' perspective: Odds are if you just got started the company is taking a loss on you. Maybe it took 3 months to get you to the point where you could produce substantive work and you did valuable work for 3 months. Your peers who worked a full year produced 9 months of useful code.

Learn to pick your battles as well. You only have so many bullets. Use them wisely. I would imagine your stub will be 5-10k so in terms of pro-rated comp you're like 10k away? Is it really worth fighting your boss over that vs. asking for a promotion or to run your own book or for a bonus bigger than your salary if you generate serious revenue down the line? Your boss is way more likely to go to bat for you if you've put money in his pocket for a few years rather than just being some kid off the street arguing about relatively small money.

 

YEa its natural to get a stub. So you were there 6 months? how much of that were you a drain on resources though? lets say you were only "producing" for 4 of those months (learning systems/jobs etc). Even then, unless you are a direct revenue contributor you dont really have any reason to counter a discreitonary bonus number. Unless you directly generate revenue, your fair market bonus is what someone is willing to pay you, and os unless someone is willing to pay you more then your fair market bonus is what they give you. Also even if your performance review was as you say excellent, id argue that your "peers" who have been there over a year will be judged compared to a higher bar. To get a good performance review for your first 4 months in general all it takes is to not be a total disaster.

 

I was a summer intern before my offer, and in my project I actually contributed significantly to P&L--not bullshitting. None of my time there since I started full-time was spent learning. I built programs for them that are essential for their performance. In the fair market my worth is much greater. That was part of the issue with my bonus. I feel like I'm underpaid, as it is with the "token bonus." However I'm willing to chill on it for at least around a year because I like the company and what it does.

 

If you are truly worth a lot more, then go get an offer for that amount and use that as an argument to get paid. Thats what im trying to say in a way. If you are truly worth what you think, you should be able to find someome to pay you that much. After all unless you are the guy providing the money, your fair value is only what someone else with the money will pay you to generate returns from their money.

As in unless you are risking your own capital, if someone gives you 100m, and you make 10m, what is your fair value? Your fair value in this case is what someone else would pay you to generate that return on that capital base with that return/variance profile. In the case of a pure PM, if you are getting 5% of the profit you make, but someone else will pay you 10% but restrict you on the things you can do and give you lower capital, then you cant go to your current boss and say you are worth 10% if that makes sense.

It also gets trickier if you are not a PM. It sounds like you are a step removed from true revenue generation, which makes it even trickier.

All in all, it seems like you have accepted that even though it might seem you are being short shafted, you just have to bite the bullet in this case unless you have direct other offers to use as an argument. And next bonus cycle be prepared with some other offers or at least market comps from headhunters + some attempt at estimating how much revenue you have contributed to to use as ammo. No matter how nice they are, bosses will always try to short change people if they think they can get away with it.

 

Stop talking while you're ahead... We recently hired a director about 3/4 ways into the year. He put on good trades and made money. We just got paid out bonuses, he said his expectations was for nothing and joked 'as long as they don't take money away from me I'm happy.' This is a guy that used to be head of the desk at a US BB in London, and conducted himself in a very classy way. You are a new hire that can be replaced on a whim, and are pouty and threatening to quit over 10-20k. I hope that gives you some perspective.

 

Stop talking while you're ahead... We recently hired a director about 3/4 ways into the year. He put on good trades and made money. We just got paid out bonuses, he said his expectations was for nothing and joked 'as long as they don't take money away from me I'm happy.' This is a guy that used to be head of the desk at a US BB in London, and conducted himself in a very classy way. You are a new hire that can be replaced on a whim, and are pouty and threatening to quit over 10-20k. I hope that gives you some perspective.

 

I'd give you no bonus if I were your boss, as I don't need to to keep you. Discretionary is discretionary. WTF you gonna do? Whine and moan about it? You just started, you are worth shi.t. You just programmed something? Great, I'll get one of the ten kids outside to do the same thing, nothing special about you or what is expected of you. You are a quant, get that into your head, you won't be getting the massive bonuses traders are getting, that's tough and it's called life.

The day you can reasonably be expected to be poached somewhere else, then only on that day can you expect a decent bonus. Token is still a bonus. I got a doughnut one year after having contributed a lot of clean cut risk free P&L - I moved on to another company and didn't bitch about it on a forum. They will pay you what they need to keep you - 105K is a great amount for a 1st year.

 

Point taken. I don't think being concerned about my salary is "bitching." I posted to ask for advice on how and when to negotiate this situation. I've known people who are too afraid to ask for raises and such, and don't want to end up like that.

 

According to 2014 bonuses, the average base salary was about 70k. As far as bonuses go, the low spectrum was about 40k, the mid was about 45k - 55k, and the top tier performers were pulling in about 60k -70k. So if you were a top performer, you were making around 135k - 145k. The average first year analyst was making about 125k.

 

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