4 ms·
Disagree with this on several levels. One specific challenge comes as tech companies push more and more compensation to bonuses and other must-be-present-to-wi
by addaon 4y ago
Disagree with this on several levels.
One specific challenge comes as tech companies push more and more compensation to bonuses and other must-be-present-to-win approaches (RSUs, etc). If you leave shortly before a trigger date, you've essentially been working the entire previous year at a discount, since your contractual bonus for the time you worked will never be paid. If you continue significantly past a cliff, then your transition time is being worked at a discount.
If you give significant notice, one of two things can happen. If you give notice before the cliff, planning to depart after the cliff (that is, maximizing the percentage of the time worked where the company actually pays you what they agreed you were worth), the company can accelerate the departure schedule and avoid paying out; if you give notice after the cliff, you're inherently volunteering for discount work for a company you didn't even want to work for at full price!
In practice, I think at this point that companies that choose to put a large amount of compensation behind a cliff this way are responsible for understanding the consequences of that choice. If you pay 30% or my annual comp, and that of all my peers, on Monthuary 15th, then you should assume that you will get a cluster of resignations on Monthuary 16th each year, that those departures will happen in the standard two weeks, and that because they are clustered you will be unlikely to hand off as easily and fully as if they were scattered. But hey, you managed to screw some of my coworkers who had to leave mid-year for family reasons out of a few bucks!
- gnicholas 4y agoI've heard of employers paying signing bonuses to make up for the fact that an employee is leaving a partially-accrued bonus on the table at the employer he's leaving.
- addaon 4y agoSure, getting your bonus bought out provides some superficial relief for this problem. But if your next employer thinks that your value is high enough to buy out your bonus, they likely think that independent of the current date (modulo a special case where your value /now/ is significantly higher than it would be in another quarter or whatever). Your next employer gets no value from the fact that you're leaving previous money on the table; if they offer to buy out a bonus, stay, get that bonus, then remind them that they thought you had that additional value and you'll take at as a signing bonus now, thank you very much.
- gnicholas 4y agoI get what you're saying, but it could just be a way for a new employer to say "we have a policy of treating people fairly. We know that some new hires are going to lose out on bonuses depending when they join, so we have a policy of compensating these new hires for this loss". I wouldn't want to start off with a new employer by negotiating for a bonus buyout and then staying long enough to get my original bonus (and expecting the buyout anyway). I would be interested to know if anyone has done this successfully. If I thought I had the upper hand in negotiations, I'd just ask for more pay, or a signing bonus independent of my foregone bonus.
- addaon 4y agoIf an employer offers a bonus buyout during negotiations, that's a straight-up offer of more compensation, in the form of a signing bonus. It's hard to come up with scenarios where an employer would offer you a certain total compensation, and then revoke that offer because a different, previous company paid you a bonus. Would you expect your employer to reduce your compensation if you refinanced your mortgage, in the name of fairness, since that portion of your salary was "intended" to cover housing costs? Compensation is about estimation of value (expected to be) delivered vs costs (expected to be) incurred, in the presence of highly asymmetric information. Previous bonuses might give nice framing for certain points during the negotiation, but that's just storytelling; the real negotiation doesn't care about them, and only slightly cares about start date in most circumstances.
- jefftk 4y agoSay the company hiring you agreed to pay relocation expenses from NYC to SF. If they then learned you were actually already living in SF they wouldn't just give you the money.
- addaon 4y agoIf the company went through the approval chain and got everyone to sign off on you being worth $comp + $relo, and you're value isn't effected by not choosing to $relo (because, in this case, you're already there), it should be pretty trivial to get everyone to approve a change to call that $comp + $signing_bonus since everyone involved already agreed to spend that portion of their budget on you. The case this doesn't apply is if their assessment of your value changes because they no longer trust you as much -- which does hint at an underlying rule of "even during a negotiation, don't be a dick" -- but the failure risk here is that you're providing symmetric access to the information that you're an asshole they might not want to work with, not that you asked for the compensation to be categorized differently. So, yeah, I definitely have never solicited a bonus buyout and then done a bait-and-switch. But I've never actually solicited a bonus buyout -- I negotiate in terms of compensation I receive, not labels on it. I've had companies offer me bonus buyouts before, sometimes quite significant, and I've always taken that as a direct indication of their assessment of my value, not as something specific to the time of year.