My daughter, a college senior, is considering job offers from a major New York retail banking firm, recently merged with an investment bank. She was unable to get an idea of what kind of year end bonus she might expect, and her contacts are now gone celebrating the holidays. Are there any dopers out there who might have an idea as to what she could expect?
Sadly, if it’s anything like the company I work for, she probably won’t get much 
Last year people got a bonus of 20% of their salary. This year, looks like it’s slim to nothing.
Of course my situation is in no way similar to hers, but I just wanted to get that out. Feels better. I would have got a big fat check had I started a month earlier last year, but this year I get nothing. Stupid economy.
Clarification queries - So her possible acceptance of any job offers is contingent upon a year-end bonus?
Shall I assume she is happy with working conditions, job responsibilities, possible advancement, salary and benefits, etc.?
Duckster:
She is comparing two offers, both of which are similar except for salary - one firm offers a higher straight salary, but no bonus. So she wanted to have an idea what range any possible bonus might be. Both offers have good and bad points to consider, she is trying to make sure she knows as much as she can about both.
Bonuses can vary by quite a bit, and with the info you’ve given it’s hard to say. Without an employment contract that spells it out, there’s little to go on.
Some companies do make the potential for bonuses a real benefit, as does my employer. I have nothing in writing, but on making me an offer, my boss said that the bonus plan was based on 10-50% of salary. The reality has been, for three years now, 28.2%, 33.3% and 6.7%. This is from a company that does not have a screw the employee ethic. So, I knew it wasn’t a good year, and I’m not upset about it.
Other companies make promises (not in writing) and just blow on by them. The only way for your daughter to really know is to somehow learn about their bonus record. That would best come from a past or present employee.
Good luck!
I work in the New York office of a large investment bank and I’ll say the only way to get this information is from either a current or former employee.
The experience I’ve had with my own company is that the bonus is strongly tied to market conditions and the performance of the company, but also to individual performance. Well, maybe I don’t mean individual performance but rather how valuable you are to the company. Someone who does general office work, even though they’re very good at what they do, is easier to replace than a skilled programmer who’s the only one who knows how the trading system works. I’ve earned good bonuses [22-30%] because I’ve made myself someone who the company would rather compensate, than risk having to replace.
But really, in the end, what Ringo said – if it’s not in writing, give it the same weight you would any other promise.
I’d be very cautious about giving too much weight to bonuses when selecting a job. At one time my job paid a 5% bonus at Thanksgiving, a 5% bonus at Christmas, and a year end bonus that varied depending on profit. Today we get no bonus for Thanksgiving, a crummy Turkey at X-mas, and year end bonuses are a sick joke those of us who have been here for a while just snicker about.
On the other hand, I’m making over 3X what I made when I first started here, and job security is solid. Doing the math (even adjusted for inflation) I’m making out like a bandit.
My point is, bonuses are definately something to consider when hunting for a job, just be careful on how much weight you give them.
Before I changed careers, believe it or not, I was a full time police officer. Worked twice as much as I do now, and the word “bonus” was equated with dirty cops who took bribes. Usually from New York bankers trying to get out of speeding tickets.
:pjust kidding. just kidding!
The whole bonus thing strikes me as bizarre. I’m looking for work, I write up a resume, I get an interview, I get a second interview, I negotiate for a salary, I get the job, I work, I budget my income based on the negotiated salary, then out of the blue, BAM a big check at the end of the year, screws up your budget and taxes. So next year you plan for a bonus and surprise, the company had a bad year so there is no bonus. Now you are short money. I’d rather get a higher salary than a random bonus.
When looking for a job I find out what the bonus policy is. The policy will change as time goes by, company gets bought out, recession comes around, whatever, but at least you have an idea what the policy is before you sign the acceptance letter.
Remember, a job interview goes both ways, they are finding out if they want you to work there, and YOU are finding out IF YOU want to work there. Life is too short and work sucks enough to get stuck at a lousy company.
Obvioulsy being picky about where you work is subject to various factors like needing a job immediatly or if you are thinking of changing jobs, etc.
Asking employees of a prospective employer about the bonus when you did not ask the main interviewer about a bonus may send mixed messages when the employee reports to the main interviewer that you asked about bonuses.
Sounds like your daughter is in a good position to choose between a couple of different jobs.
Don’t be afraid to ask about signing bonuses, and more vacation time. If you don’t negotiate that stuff now, the next opportunity will be a year from now.
Salaries are better than bonuses in many ways:
- Automatically in base pay next year, bonuses aren’t guaranteed.
- You can plan on the money being there.
- Any raises in base pay are compounded year over year, bonuses aren’t
- Some benefits (401k, life insurance) may be based on base pay.
- When changing jobs and giving a salary history, bonuses are irrelevant. Base pay numbers can transfer from job to job.
I would always take the job with the higher base pay unless you had VERY good reason to know that the other job ALWAYS gave BIG bonuses, and would continue to do so.
I prefer the bonus system, but I can see where others might not. If I have a good year and they give me a $XX,OOO bonus, and the next year everything tanks, I’m fine with my employers not feeling like I’m too expensive to keep, which might be the case had it been a salary increase instead of a bonus. That, of course, is based on a liveable base salary.
OTOH, I can see that someone who works in an area such as administration, where productivity is seldom visible unless it’s just not working, might prefer the higher salary.
My employer pays the non-producers relatively high salaries and they get modest, standardized bonuses; they pay those of us whose efforts affect the bottom line more visibly average salaries, but bonuses reflect how for out of the park you hit one. If you did.
Basing a job selection decision between bonus or no bonus in this case is a bad decision. As with the disclaimer when it comes to investing, previous results should not be used for future potential earnings.
In your case, all other things being equal and only deciding based upon what you’ve supplied, I would take the higher pay job. At the very least, one can assume that income for the calendar year. A lower paid offer, but with the possibility of a bonus in this economic climate is not a good choice to make. If the economy takes a sharp change – say caused by a war or terrorist attack – both job salaries might suffer, but you can probably bet the one with the implied bonus will not deliver at year’s end.
A bird in the hand …
