Please, Sir. I Want Some More
What if you're not satisfied when you get your bonus? Could you negotiate for more? Success is rare, and it could be a dangerous path to pursue.
"In 20 years at Goldman, I never once saw anyone renegotiate their bonus after it had been announced, ever," says one former department head at Goldman Sachs, which is reportedly about to award some $16 billion worth of bonus money. "Bonuses are decided in October and it's not done on the back of an envelope - it's a very long and thorough process."
Renegotiating a bonus at this stage in the game is hampered by the audit cycle. "Bonuses are announced around December 15th and the end of the financial year is November 29th," says the former Goldman executive. "The accounts are now closed."
Although average compensation at Goldman is set to be 40 percent higher than last year at $620,000 per employee, the ratio of compensation to revenues for 2006 is at an all-time low. If last year's ratio still held, each employee would receive an additional $40,000.
We Made a Mistake
Never say never, however. The head of HR at one bulge bracket bank says the firm will occasionally bump up bonuses after numbers have been announced, though doing so has more to do with remedying errors than appeasing disgruntled employees.
"We may have prorated the bonus based on the wrong hire date," he says. "Or a manager might realize they left a major revenue element out of bonus calculations. In those situations we can give an advance on next year's bonus, but it's really very rare."
Headhunters are more positive about the prospect of renegotiating a bonus. "If you're a top performer, the best thing to do is to say you've got another offer on the table," says Zaheer Ibrahim, of search firm Kennedy Associates.
But this is a dangerous game: A bank that calls your bluff and asks you to give notice before bonuses are paid out may be able to avoid paying you anything at all.