Reneging on offers
I just signed an offer, but was a little kinda rushed into it. It turns out I received another offer just shortly that has about 5-10x bonus upside as the first offer, and 30-50% boost in base salary. I kinda like the first firm I signed with they have great culture, great folks (and if everything, including $, were equal I would pick the first one over the second one), but the new offer gives me significantly more responsibility and financial upside that's hard to ignore (the 2nd offer allows me a full book and discretionary, better % of PNL and book size). I'm kinda feeling bad I signed the first offer already (didn't want to risk getting zero offers) but the upside on the 2nd offer is very significant. What would you guys do in this case? Stay ethically with the 1st one or renege and take the second one? I'm quite experienced in the buy-side industry not fresh out of grad. What is the right way to handle this? Culturally love the first firm but the money difference/upside is hard to ignore for the 2nd offer.
ask for a counter and if they can get you to within the ballpark that you won't be unhappy 6 months in, just stay with it, otherwise just take the 2nd one
it's a buyside PnL risk taking job, your upside is what matters, nothing personal.
Negotiate with the first firm. If they really like you, they will match it. Otherwise, go with the highest offer but be ready that you will upset the first firm and it could potentially blacklist you there.
Sounds like should see if the 1st firm can match, if not (say close to ballpark range), pick money over ethics. I'm ok with being blacklisted from the first firm. Just makes me feel kinda bad but the money difference is hard to ignore.
Personally I would not bother trying to negotiate with the first shop and just renege and go with the second offer.
5-10x bonus upside is an insane difference. There are 2 issues with negotiating, as even if you are successful:
1. Presumably this bonus upside is not a contractual (ie. written into a contract) % of P&L, but is a discretionary bonus on contract and you are verbally assured when you join roughly what it will be. So they can tell you when you join yes ok its 5-10x the original offer, then 1 year later they can just pay you the original bonus they were planning to pay (or maybe a bit more). They will give some excuse that your performance wasn't good enough, tough year for firm, etc. What are you going to do? You will not be getting your other offer back at that point, and it is tough to leave somewhere after being there for only 1 year. It happens ALL THE TIME that people do not receive bonuses that they are guided to in HFs. Even if you think this is a low probability likelihood, this is definitely a possibility and I would not be niave.
2. Comp progression will likely be much better at the shop offering you the 5-10x off the bat (is likely their standard deal) vs. the original guys where you have to negotiate hard with them.
Overall I think its much better to go with the shop that gives you the better offer willingly. To be honest, it is tough to really believe that much in negotiations for bonuses because at the end of the day once you are in the door they can pay you whatever they want, you have lost all leverage, and it is difficult for you to leave within the first year or 2 (and tough to move around buy side in general).
"Presumably this bonus upside is not a contractual "
The bonus upside is written into the contract with the second firm, it is not discretionary.
Makes the decision even easier IMO
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