Got an offer from a medium sized hedge fund. Verbal offer was 500K but the written offer is: 200K base 250k guaranteed bonus (but prorated) 50k sign on The bonus is prorated for amount of time in 2024 spent at the company and will be paid in 2025. Because the bonus is prorated comp next year is really more like $290K. The company does annual bonuses each year that are paid in Feb of the following year. Next year I would be only getting a small bonus in Feb- the prorated guaranteed bonus for 2024. The recruiter acknowledges this but says that in 2025 I will earn a bonus that will be paid in 2026, and I should consider that bonus part of 2025 compensation. This also seems weird to me: shouldn’t I consider compensation for a given calendar year the actual money in my pocket I get during that year? In other words, the number on my W2? I am having trouble evaluating this offer. Any pointers?
It's not supposed to be this complex. You want 500k annually. They came back with a way to make it work. If this is a deal breaker, bow out with a final counter.
this is only complex because OP is relying on W2 when the timing of when OP joins doesn’t line up. OPs would still be averaging a higher avg monthly TC over time but the reported W2 will drop solely due to timing.
? it is 500k (450 after 1st year) 12 months from now, you will have earned 500k worth. Some of it will just be paid later. Consider it similar to rsu vesting why are you concerned about calendar year and w2 when you are not joining at start of calendar year?
The reason why I am considering calendar year is it’s an easy standard that I can use to compare offers with different equity vesting and bonus schedules
Not worth. Stay at Apple
Is there a reason why? I’m looking to switch not only for comp growth but also learning and moving faster without tons of bureaucracy
The problem hedge fund is solving is too specialized. The core is extremely low latency implementation in C/C++. Bureaucracy is always everywhere. Job security is much lower compared to tech. Prorated bonus makes sense Join if TC is 600K+ or just switch to a new team at Apple if you are looking for learning,moving faster and less bureaucracy.
That’s how it works
Is it normal to effectively “lose” money the first year and make it back later?
you aren’t “losing” money. It’s just a timing issue. That said, assuming you only get your bonus once a year and you need to be there during Feb to get it, your income becomes a bit more volatile.
At the moment you get 400k a year. I would ask 250 base with 200K bonus. I would tell them that the year you join the base + sign-in + bonus should equate 400k. You do not want to change jobs to lose money the first year and recover them across multiple years with 50k more you get. For comparisons you should consider the compensation for one year inclusive of the bonus you will get the next one. For tax purposes you usually consider only what you get in a calendar year.
I don’t get it. The 250k bonus is prorated over how long? What happens after that? Is it 250k bonus per year but paid out over multiple years?
I think you’re over thinking this and this is similar to starting a new company who gives RSUs but has a 1yr cliff. Prorated only affects your first fiscal year, after that, you’ll be average the 37.5k/month over a 12 month window. Fiscal years (which dictates your bonus( and tax years (your w2) don’t line up and neither really line-up with your personal calendar (when you actually want to switch companies). This is just a timing issue. You’re still making more on avg per month over time.
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Depends on current TC. Also is this swe role in a hedge fund? HFT like c++ or data analysis like python?
Current TC is 400K: Base 190 RSU/year 180 Bonus 20
Bonus is 30, sorry typo