Yeah, but if they fire you on X-1, you can almost surely get your “guaranteed” bonus.
Does nobody else take issue with a “bonus” being “guaranteed”? Isn’t that the meaning of bonus… its relative to some performance measure. If it was guaranteed you should just have a higher salary.
No. Bonuses are paid partly as performance enhancers but party to match the company’s payout to its employees with its own revenues. For instance, HF incentive fees are paid (depends) annually or quarterly or whatever and matching the employment cash flow with that is just normal business. Edit: This is both timing and amount
Thats my point… if its to match payouts to revenues that is performance of the company. The company can’t guarantee its success… so why can it guarantee your payout based on its success. If it is a “bonus” it is never guaranteed
JasonU Wrote: ------------------------------------------------------- > Thats my point… if its to match payouts to > revenues that is performance of the company. > > The company can’t guarantee its success… so why > can it guarantee your payout based on its success. > If it is a “bonus” it is never guaranteed Have you ever been paid a bonus? I’ve had guarantees of X, and then been paid a bonus of X + 2000 (oh, I’m pi$$ed) and 15X (oh this is good). If you go for a mortgage, the bank cares deeply about X for example.
As Joey pointed out, one could say something like 1) We’ll pay you this much monthly for your time. 2) We’ll pay you a lump at the year end as well, because we don’t really want to pay it all out monthly. And if we axe you before, maybe we can get out of it. 3) If you do well, we’ll give you a bunch more as an incentive to perform really well for us. When you add it all up, 2+3 come out at more or less the same time, so let’s just call that a year-end “bonus.” Which is Latin for “good.” You’ve been a good doggie! Here’s a bonus!
I know a lot about executive compensation and JDV is right. A guaranteed bonus is a “guaranteed bonus.” You can easily review the employment agreements filed with the SEC of tons of companies and a clause will say they will get a guaranteed bonus (usually right after what their annual salary will be).
I understand the concept of it and that it is in fact guaranteed… I was just saying calling it a bonus (as opposed to a seasonal increase in salary) bothers me
Yeah I hear you. On another note, give me one fat bonus (of $25M) and I’m semi-retired managing my own money.
JasonU Wrote: ------------------------------------------------------- > I understand the concept of it and that it is in > fact guaranteed… I was just saying calling it a > bonus (as opposed to a seasonal increase in > salary) bothers me There are a lot of reasons for using a “bonus” rather than simply upping a salary: - money is out the door later (time value baby!) - company generally doesn’t have to include bonus in calculations for defined benefit/contribution plans - generally won’t include bonus in matching funds for a 401(k) - leverage to keep you at the company at least to a certain point - a lot easier to eliminate or reduce a bonus in subsequent years if needed than it is to CUT a salary by 20-30% - I’m sure there are more
willchan11 Wrote: ------------------------------------------------------- > Yeah I hear you. > > On another note, give me one fat bonus (of $25M) > and I’m semi-retired managing my own money. You need $25M for that?! Uh, you shouldn’t…
I see UBS or someone was going to introduce the concept of a malus - sort of taking back bonuses. Gotta love latin.
I see UBS or someone was going to introduce the concept of a malus - sort of taking back bonuses. Gotta love latin.