Getting fired as MDs are handing bonuses out is not for the faint of heart. What if you lose your job just before the big payout?
Firms on Wall Street hold most of the cards, at least contractually. Ken Taber, an employment lawyer with Pillsbury Winthrop, says, 'Normally the company has a policy that says you only get your bonus if in fact you have been there and continue to be there on the day the bonus is paid.' The policy is almost always enforceable in the absence of a contractual provision entitling the employee to a pro-rata bonus.
'I've got one guy now whose compensation is probably three-quarters bonus and he has been let go over what the firm contends are suspicious transactions, and he vigorously disputes that,' says Taber. 'But he was on target to get a several hundred thousand-dollar bonus and they are paying him nothing, even though over the course of the year he did substantial deals which reaped the firm a substantial amount of money.'
Recruiter Mike Flood of Westwood Partners agrees that the bottom line is all that matters in some cases. 'Some firms have a higher moral conscience, while others couldn't care less,' says Flood. 'JP Morgan strikes me as a place recently that's been pretty brutal when it comes to firing people close to bonus without a net, particularly where employees have been with them for awhile.'
Some other firms take a different tack, according to Flood. 'What I've also seen, particularly at places where I've been doing business the longest, is that the guys who run this have a heart. I think that these firms tend to try to avoid unpleasant situations as long as they can, and for the most part they try to be fair.'
Fair in this context, says Flood, includes pro-rata bonuses, early stock vesting and unlocking the handcuffs that hamper an employee's ability to work for a competitor.
Still, many financial services firms would prefer to avoid expensive parting gestures like these and choose a passive-aggressive approach over outright firing-which leads to the final signal that your career is kaput.
'What they usually do is just screw you on your bonus and then hope that you leave,' says Flood. 'If you pay someone down, and they quit and go to a lesser shop, you kind of get off for free.'
Don't forget: How free the bank gets off could still depend on you, your circumstances, and your lawyer.
See Part 1, Are You Next to Walk?
See Part 2, Can Your Job be Saved?