Question about annual bonus and leaving job

[zieg]

Edit: Alright, I've decided that if I do leave before the bonus is paid, I will simply consider it lost and won't kick up a stink about it. Thanks for the input everyone. I've been with this employer for quite a few years and it's been the first time I have been in this situation, but I'm glad I asked about it.




Not too sure where to ask about this one, so I thought I'd try here.

Here are the relevant facts:

-Annual performance bonus based partly on company profits, mostly on personal performance (achieving goals etc)

-Bonus is paid as a percentage of earnings over calendar year

-Bonus is paid out around April once all the financials are done


My question is, if I leave the company in say February, after having worked the entire year before, am I still entitled to the bonus in April?

The way I see it, the bonus is part of my compensation and therefore earnings that I am legally entitled to. When I called the Government of Canada information line, they said since a small part of it is determined by company profits, the whole bonus is considered discretionary and if I leave before it's paid, I'm essentially fucked.

Opinions? Experiences? Obviously I can't just go and ask HR on this one. Not sure I can keep my sanity to stick around til April but the bonus is going to be like 25%. :banghead:

[revelations]

My vote = lose 100%

No money is worth sanity and mental health. I would try getting a LOA first though ..... no harm anyway.

[NoMoreG35]

I really don't see a reason why the company would give you the bonus if you no longer work there.

[syscal]

Only in Alberta...

[pheoxs]

Every job Ive been at if you leave before its in your bank account you lose it, regardless of when the period they calculate it is.

[zieg]

Hm, that's what I was afraid of. Okay, thanks everyone. Good to know. It's certainly not the only factor here but it is a consideration. :)

[spikerS]

performance bonuses are a reason to stay at the company. If you leave, they have no reason to pay.

Start drinking. if base pay is $60k, there is a lot of shit I would put up with for $20k...

[woodywoodford]

Depending how in demand you are, some employers will give you a signing bonus to make up for your walking away from the bonus. Not likely for junior roles but later on..

[e31]

Actually, you are entitled to the bonus money. Any employment lawyer could tell you this. If you think you are up for some big money it might be worth pursuing.

Do your homework folks, Know your rights.

[HiTempguy1]

Originally posted by e31
Actually, you are entitled to the bonus money. Any employment lawyer could tell you this. If you think you are up for some big money it might be worth pursuing.

Do your homework folks, Know your rights.

Ding!

Now of course, the reality of the situation is that they own your ass and have the lawyers to make it hell to get your money and drag it out.

As someone else said though, $20k net cash (as an example) is worth A LOT to me at this point in life, I would gladly spend a lot of time fighting for that kind of cash. If I was 45 years old? Prolly not so much.

[blitz]

Pursuing legal action to get your bonus is a good way to burn every bridge you've made :dunno:

[zieg]

Well I guess, the matter of legal entitlement aside, probably best to just stick it out til the spring, and that early in the year I'd be much more comfortable walking away from ~1/4 of 25%, heh..

[pheoxs]

Originally posted by HiTempguy1


Ding!

Now of course, the reality of the situation is that they own your ass and have the lawyers to make it hell to get your money and drag it out.

As someone else said though, $20k net cash (as an example) is worth A LOT to me at this point in life, I would gladly spend a lot of time fighting for that kind of cash. If I was 45 years old? Prolly not so much.

It's not that simple actually, there are quite a few criteria to meet to be able to be eligible to receive the bonus after he leaves. If the employment agreement was written by a competent lawyer the wording will legally get them out of paying the bonus. (The employer can specify the bonus will not be paid if the employee leaves, and that is perfectly legal)

If it's a smaller firm or a union job or something, then he likely may be able to get it. All depends on the wording on the agreement that specifys the bonus. And that he's received it before, other employees are receiving theirs, that the bonus is framed as a significant portion of the employees compensation, and other things.

[leftwing]

Originally posted by e31
Actually, you are entitled to the bonus money. Any employment lawyer could tell you this. If you think you are up for some big money it might be worth pursuing.

Do your homework folks, Know your rights.

I would assume every company, or at least most, would have some sort of disclaimer saying that to receive the bonus you need to be employed up to a certain date (most likely date of payment).

I wouldn't expect my bonus if I left my company.

[kaput]

.

[FraserB]

Would taking a bunch of vacation or stress leave hurt the bonus?

[Neil4Speed]

You would be tied to the rules of the plan text of your bonus. Your plan text would almost certainly state that you must be an active employee on the date of the bonus paid in order to receive the bonus.

[BrknFngrs]

Unless your bonus/employment agreement specifically states otherwise you'll be SOL if you leave before the bonus is paid out

[ExtraSlow]

Even if it might be possible to take legal action to get that bonus, there are two very good reasons not to take that path:
1) The lawyer will take a BIG slice of any money you do get
2) it can have a huge negative impact on your reputation.

In many businesses, reputation is everything, and this is a surprisingly small city.

But, I'm pretty sure every place I've worked recently has had it clearly written that you have to be employed on the date of payment to be eligible.

[killramos]

Yup even iff you sued quitting would almost certainly bump you to the lowest discretionary bonus category for example my bonus os xx-yy % and quitting and dieing would almost certainly mean xx

Managemt has made it quite clear to us that all the short term incentive, long term incentive, raises, and stock option dividends are paid at staggered dates on purpose to make it difficult to quit all year :rofl:

[Mitsu3000gt]

You'll be forfeiting that bonus for sure if you leave, and if you try too hard to get it, you'll make a name for yourself. You can, however, leave shortly after you legitimately get the bonus. I've got bonuses before after I gave my 2 weeks since I was still an employee, even though my departure was known.

[ddduke]

When I left my last company I was entitled to a pretty hefty bonus since it was production based and my division grew by 300% in the year. Definitely did not get it.

I don't know if I was legally entitled to it but word travels fast in that industry and if I were to cause a shit fit over it I bet no one would want to hire me again strictly based off that.

[Env-Consultant]

The way my contract is written it would not entitle me to a bonus if I quit. Yes, looking at it holistically it's a "hey, wait, I earned that!" - in reality, for most contracts, it falls outside of your normal pay and it is discretionary - if your manager decided to pay you 0, as an full time or recently departured employee, tough shit. Again, that depends on your contract, but if it's written where you're entitled to it that comapny should annihilate their HR legal team.

It always drives me nuts when people whine about their bonuses. It makes up a small percentage (usually) of your annual salary - fight hard to make what you think you're worth and your bonus shouldn't matter. Has worked out incredibly well for me.

[ddduke]

Originally posted by Env-Consultant
It always drives me nuts when people whine about their bonuses. It makes up a small percentage (usually) of your annual salary - fight hard to make what you think you're worth and your bonus shouldn't matter. Has worked out incredibly well for me.

It all depends how your bonus' are structured. My old company only paid $60k as a base salary and everything else was strictly on how well your projects were doing. But at the same time it was almost completely in your hands how well they did. Bonus' always out weighed salary there.

[killramos]

Originally posted by Env-Consultant
The way my contract is written it would not entitle me to a bonus if I quit. Yes, looking at it holistically it's a "hey, wait, I earned that!" - in reality, for most contracts, it falls outside of your normal pay and it is discretionary - if your manager decided to pay you 0, as an full time or recently departured employee, tough shit. Again, that depends on your contract, but if it's written where you're entitled to it that comapny should annihilate their HR legal team.

It always drives me nuts when people whine about their bonuses. It makes up a small percentage (usually) of your annual salary - fight hard to make what you think you're worth and your bonus shouldn't matter. Has worked out incredibly well for me.

I don't know about that Bonuses are a powerful tool for companies to pay employees more during periods of success.

In many cases bonuses are in the order of 50% of base salary so I think you would be foolish to write it off...

[Env-Consultant]

If your bonus is 50% of your salary, you're either working a sales job or for a company that underpays you, IMO. Sales, fine - anywhere else, where is most of that coin going, where all of a sudden they can afford an extra 50% of your salary...

[Dumbass17]

am i the only one in calgary working in an industry where no bonuses exist?!

my ex gf is an accountant for an oil and gas company and she gets angry if her annual bonus is under 15%. They are told upon hiring it's usually 20% and no one gets under 10%, no matter how shitty of a job they do. Some people even get 30% bonus! and they're already making 130k!!
:dunno: :dunno:

[e31]

Originally posted by Dumbass17
am i the only one in calgary working in an industry where no bonuses exist?!

Hey man, you pick your own username around here.

[ddduke]

Originally posted by Env-Consultant
If your bonus is 50% of your salary, you're either working a sales job or for a company that underpays you, IMO. Sales, fine - anywhere else, where is most of that coin going, where all of a sudden they can afford an extra 50% of your salary...

Tons of project management positions pay bonus' based on performance with salary being almost a perk. If you manage your projects well, are completed ahead of schedule, hire competent contractors at reasonable rates and come in well below budget you get rewarded with a bonus. I don't know how this doesn't makes sense to you.

My experience with companies like this are on of Canada's biggest industrial construction outfits and a company that deals with mostly residential land development in Calgary, one of which engineers and CETs are fighting to get on board with.

[killramos]

Originally posted by Env-Consultant
If your bonus is 50% of your salary, you're either working a sales job or for a company that underpays you, IMO. Sales, fine - anywhere else, where is most of that coin going, where all of a sudden they can afford an extra 50% of your salary...

That isn't true at all, especially in Calgary.

The Bonus metrics for my entire company are available ( with a tier of 50%), officers and the CEO receive a great deal more than that as well.

Maybe you are just naive as to what your superiors make.

[Lex350]

Originally posted by Env-Consultant


It always drives me nuts when people whine about their bonuses. It makes up a small percentage (usually) of your annual salary - fight hard to make what you think you're worth and your bonus shouldn't matter. Has worked out incredibly well for me.


I don't agree. I was in this situation. They owed me a $35k bonus. Time came to pay and they kept on making excuses on why they couldn't. I finally got a lawyer friend to send them a little note. It took another 3 months to get and then I quit the next day. I thought $35k was worth hanging around for.

[Env-Consultant]

Originally posted by killramos


That isn't true at all, especially in Calgary.

The Bonus metrics for my entire company are available ( with a tier of 50%), officers and the CEO receive a great deal more than that as well.

Maybe you are just naive as to what your superiors make.

Nope. There are positions that have 50% bonuses, but they're few and far between.

[pheoxs]

Originally posted by Env-Consultant


Nope. There are positions that have 50% bonuses, but they're few and far between.

Yeah, people seem to forget this. For every manager making a huge bonus there are dozens of worker bees they make nothing. But everyone on beyond is baller so they probably don't realize there are non management jobs out there

[Neil4Speed]

Originally posted by killramos


That isn't true at all, especially in Calgary.

The Bonus metrics for my entire company are available ( with a tier of 50%), officers and the CEO receive a great deal more than that as well.

Maybe you are just naive as to what your superiors make.

What industry are we talking about here, 50% target bonus are very rare in in between in the Energy Sector if the company is anything larger than a microcap. You have to be a director or above to be getting that kind of target, and generally its only executives.

[Neil4Speed]

Originally posted by Neil4Speed


What industry are we talking about here, 50% target bonus are very rare in in between in the Energy Sector unless your a micro-cap company. You have to be a director or above to be getting that kind of target, and generally its only executives.

[killramos]

Originally posted by Neil4Speed


What industry are we talking about here, 50% target bonus are very rare in in between in the Energy Sector. You have to be a director or above to be getting that kind of target, and generally its only executives.

I never said I made that bonus nor that most people make that bonus i was just throwing the general statement of "if you make 50% of your base salary in bonus your either in sales or you don't get paid enough" out the window with an example. I am not talking about executives either as in many cases their bonuses can approach 100% or more...

Lots of companies have a huge weighting of compensation on bonus's though. Is your base salary a bit lower for it? Probably. Are you in a riskier area of the sector? Probably

Even at my tier my annual bonus is a huge chunk of my total pay and i wouldn't want to see it wiped away and the time of it;s payment would definitely affect me choosing a time to quit. Which is the whole purpose of this damn thread.

[mrsingh]

Originally posted by killramos


That isn't true at all, especially in Calgary.

The Bonus metrics for my entire company are available ( with a tier of 50%), officers and the CEO receive a great deal more than that as well.

Maybe you are just naive as to what your superiors make.

Agreed, at my position in my company (owner company energy sector) my bonus regularly falls between the 30-40% range. Then when you look at LTI options, they can easily add another 40-50%.

Edit: Our corporate bonus policy explicitly states that if you're not on the payroll at the time the bonus pays out, you're ineligible.

[BrknFngrs]

Definitely agree that a 50% bonus target isn't particularly common, even in Calgary, but having a significant component of your expected income being derived from a bonus doesn't necessarily mean you're underpaid either.

Some businesses aren't built around highly predictable, day-to-day income and instead rely on large scale individual projects. For these businesses in particular it isn't uncommon for a large component of their total pay package to be "at risk pay".

A dollar of guaranteed salary is worth more than a dollar of potential bonus though, so if a company is using a pay package that relies heavily on bonuses, you'd expect to see the total potential earnings under this plan be higher than the guaranteed earnings under a pure-salary pay package (to compensate the employee for the risk they're taking on)

[FraserB]

Originally posted by mrsingh


Agreed, at my position in my company (owner company energy sector) my bonus regularly falls between the 30-40% range. Then when you look at LTI options, they can easily add another 40-50%.

Edit: Our corporate bonus policy explicitly states that if you're not on the payroll at the time the bonus pays out, you're ineligible.

Jesus. You know I do the same kinda thing as you, feel like poaching me for your team?

[mrsingh]

Originally posted by FraserB


Jesus. You know I do the same kinda thing as you, feel like poaching me for your team?

Not hiring right now, but hit me up in few months, you never know!

[zieg]

Heh, come on, you know the OP is looking too! :P

I found out today that it's actually July that it's paid, and that's pretty much why. Oh well, like I said, first time doing all this and I'm glad I asked. This is going to be a hard one for me..

[ExtraSlow]

IMO, fuck the bonus, and work somewhere you enjoy it.

[pheoxs]

Originally posted by ExtraSlow
IMO, fuck the bonus, and work somewhere you enjoy it.

He was looking at leaving in feb, bonuses paid in April. Unless the job is unsafe or truly toxic you wouldn't stick out two extra months for 20+k bonus plus regular pay?

[finboy]

Use your vacation days, for those two months take 3 weeklong vacations to break up the monotony. It's better to use the days than get paid out for them and get taxed to hell, so fuck it, take the time off then leave. Use some of that bonus to have a great time.

[quick_scar]

I stuck around specifically so that I would get my bonus this year.

If you leave before it is given to you, its lost.

Have to weigh how big your bonus is vs quality of life and how much you like your job.
For me my bonus is about 30% what my salary is. So it makes a huge difference in total compensation. Say my salary is 30K, bonus would be 10K for total comp of 40 (just examples). For me that bonus is huge and represents a lot of money so it was worth waiting for.

[ExtraSlow]

I'm quitting a job this week, and walking away from more than 25% that I would get in january.
Although I'm leaving for a great opportunity that wouldn't probably wait for me.

[suntan]

Originally posted by Neil4Speed


What industry are we talking about here, 50% target bonus are very rare in in between in the Energy Sector if the company is anything larger than a microcap. You have to be a director or above to be getting that kind of target, and generally its only executives. I can tell you for a fact that some O&G positions get over 100% bonus. Mostly managers.

I wouldn't say it's common, but it's not uncommon either.

[zieg]

Originally posted by finboy
Use your vacation days, for those two months take 3 weeklong vacations to break up the monotony. It's better to use the days than get paid out for them and get taxed to hell, so fuck it, take the time off then leave. Use some of that bonus to have a great time.

I...like the way you think.

[Neil4Speed]

Originally posted by suntan
I can tell you for a fact that some O&G positions get over 100% bonus. Mostly managers.

I wouldn't say it's common, but it's not uncommon either.

Give me an example position and I can give you a true number of how rare/common it is. Are we combining LTI and STI?

When I spoke earlier I was speaking exclusively to STI.

[mrsingh]

Originally posted by Neil4Speed


Give me an example position and I can give you a true number of how rare/common it is. Are we combining LTI and STI?

When I spoke earlier I was speaking exclusively to STI.

I'm sure that would be combining both, in my example I mentioned both. I've never seen a manager level with 100% STI in O&G, VP maybe.

[ExtraSlow]

Even at VP level, I don't think you're seeing STI over 100%. It's all about the stock (RSU/PSU/Option/grant etc) for the higher levels.

[killramos]

I am not really sure why we are debating executive pay. Go read the annual financial statements of a few successful publicly traded companies.

Officers have all of their compensation listed. Plenty of VP's in this town can recieve 100% bonuses. However their bonuses are generall on CEO and Board discretion.

[suntan]

So here's the deal:

When I used to work for a large corporation here in town, I helped develop a Management Incentive Program system.

I had to keep everything in strictest confidence. If I told anyone what the bonus rates were and they found it, they could fire me on the spot. I actually had to sign a employee agreement addendum about this.

The bonus rates ranged from 50% to 150%. By the end, most bonuses ended up being around 110%. So there you go.

I don't think you guys truly know how much managers are paid at the large O&G companies. It's very high. They get great bonuses. They are told to never, ever reveal how much they are paid because, well, they want to keep people like you out of the loop.

The only reason I know so much of this is because:

1) My accountant has quite a few clients that are managers at these companies. She can't be specific, but she can tell me details from an aggregate POV.
2) My wife's co-worker's brother spilled the beans to her because he was looking for a new job and wanted to get similar compensation. My company tried to help him out.

Something else you guys all missed are the stock options that are given out like free candy.

[mrsingh]

Originally posted by suntan
So here's the deal:

When I used to work for a large corporation here in town, I helped develop a Management Incentive Program system.

I had to keep everything in strictest confidence. If I told anyone what the bonus rates were and they found it, they could fire me on the spot. I actually had to sign a employee agreement addendum about this.

The bonus rates ranged from 50% to 150%. By the end, most bonuses ended up being around 110%. So there you go.

I don't think you guys truly know how much managers are paid at the large O&G companies. It's very high. They get great bonuses. They are told to never, ever reveal how much they are paid because, well, they want to keep people like you out of the loop.

The only reason I know so much of this is because:

1) My accountant has quite a few clients that are managers at these companies. She can't be specific, but she can tell me details from an aggregate POV.
2) My wife's co-worker's brother spilled the beans to her because he was looking for a new job and wanted to get similar compensation. My company tried to help him out.

Something else you guys all missed are the stock options that are given out like free candy.

The stock options, RSU/PSU etc are all LTI. I fully agree on the 100-150% bonus level when those are included. But I think the discussion was regarding the STI component, the annual cash bonus.

[HiTempguy1]

Originally posted by finboy
and get taxed to hell

Do you understand how the tax structure in Alberta/Canada works?

I'm just saying, at the end of the day, most people are shorter on money than they are shorter on time. Mo' money is ALMOST always better. You don't get taxed anymore on additional pay beyond what bracket you are in, so if he needs the cash, get that shit paid out! :dunno:

[suntan]

Originally posted by mrsingh


The stock options, RSU/PSU etc are all LTI. I fully agree on the 100-150% bonus level when those are included. But I think the discussion was regarding the STI component, the annual cash bonus. The bonuses I'm talking about are strictly cash bonuses.

You don't even want to know how many stock options some people had.

[mrsingh]

Originally posted by suntan
The bonuses I'm talking about are strictly cash bonuses.

You don't even want to know how many stock options some people had.

I can't speak for other companies, but at my company RSU's are a cash bonus. They are paid as the cash equivalent of the stock when it vests. If the stock is $50, and you have 1000 RSU's vest, it is a nice $50,000 cash bonus. The annual bonus is a separate cash bonus on top of that.

At the manager level, many get 2000 RSU's awarded a year.

[suntan]

Originally posted by mrsingh


I can't speak for other companies, but at my company RSU's are a cash bonus. They are paid as the cash equivalent of the stock when it vests. If the stock is $50, and you have 1000 RSU's vest, it is a nice $50,000 cash bonus. The annual bonus is a separate cash bonus on top of that.

At the manager level, many get 2000 RSU's awarded a year. That's not really a cash bonus. You got stocks, they took the courtesy of selling that stock for you.

One way to look at it is what ends up on a T4, versus a capital gain.

[mrsingh]

Originally posted by suntan
That's not really a cash bonus. You got stocks, they took the courtesy of selling that stock for you.

One way to look at it is what ends up on a T4, versus a capital gain.

I get them every year my friend, there is no stock ever actually issued, you are not making money on the differential. And it is on my T4.

PSU for us would get the capital gain.

Like I said other companies may be different and I am not doubting what you were saying earlier.

[suntan]

Yeah, RSUs are treated as employment income.

That fucking sucks. Oh well. :rofl:

[Neil4Speed]

Originally posted by suntan
So here's the deal:I don't think you guys truly know how much managers are paid at the large O&G companies. It's very high. They get great bonuses.

Do they get great bonuses in comparison to many other industries (thats not shocking news to anyone here)

But you coming here and saying 100% Annual Bonuses are common umongst management at O&G Companies is asinine. Saying that your STI+LTI bonues equal 100% is common is also untrue.

[suntan]

I didn't say it was common, but neither did I say it was uncommon. It's somewhere in between.

But I will say that a few years ago, yeah, it was very common. A lot of companies had no choice. They were bleeding employees.

Can you tell me why you think otherwise? You've provided absolutely no proof whatsoever. If anything, you've only proven that you have absolutely no idea what people are paid in this market.

[pheoxs]

I think you guys need to keep in mind companies structure their compensation differently.

One company may pay a Salary for 50k with a 50k bonus

One company may pay a Salary of 50k and then OT which may add up to 50k by the end of the year

And a third company may just pay a Salary of 100k.

At the end of the year all those people might make the same amount but their bonuses are vastly different.

I took a ~30% salary cut taking this new job but because I'm eligible for OT I've ended up making probably 15% more by the end of the year. Plus whatever bonus they calculate out.

[Neil4Speed]

Originally posted by suntan
I didn't say it was common, but neither did I say it was uncommon. It's somewhere in between.

But I will say that a few years ago, yeah, it was very common. A lot of companies had no choice. They were bleeding employees.

Can you tell me why you think otherwise? You've provided absolutely no proof whatsoever. If anything, you've only proven that you have absolutely no idea what people are paid in this market.

When you say a few years ago, do you mean ~2006-2007?

Without getting too into the weeds and trying to keep this pretty high level, the 2014 Mercer Energy Sector survey (the standard in the industry), states that in the grouping between $175-200k (where you would find a heavy chunk of employees who would fall into the "Management" grouping that we stated), had a STI target of 25% at the 75th Percentile, with an actual at 31.7%.

I'm not trying to refute the work that you did in setting up a structure. If you set it up for a Micro/Small cap, where incentive was everything to allow for growth - what your saying is definitely realistic. I'm just trying to temper the OG Fandom that comes with Bonuses in the industry. Uneducated people hear about NEO incentives and think thats a norm (not to mention the sense of entitelment that they deserve a piece of that pie), when it really isn't the case.

[sabad66]

What are RSU and PSU?

[Neil4Speed]

Originally posted by sabad66
What are RSU and PSU?

Restricted Share Units, a bonus which is tied to stock price (either follows the stock price, or it is actual shares). It vests/pays over time (typically in chunks over a couple years)

Performance Share units are similar, but they have a performance metric tied to them in addition to the share price.