The Value of a Bonus

By tamara on

A Wall Street compensation package consists of an annual base salary plus a bonus of cash and company stock.  This bonus however, is more than just a monetary reward – it is also a message from your employer – a statement of your value to your company.

The bonus message is fairly simple to decipher, but it can become convoluted in delivery by mixed messages.  But the message is usually quite clear:  if you are up – then you valued, if you are down – you are not.  There are however some nuances to this.  If the overall market is down you can be down and still be valued, as long as you are down in line with the street.  If you are down substantially more than your peers, then you have been hosed.

To avoid the shock of being blindsided, I recommend having an expectation discussion with your boss.  This is a conversation in which you discuss your expected range of pay, months in advance in order to avoid surprises later.  Once a bonus is paid, it is usually too late to negotiate more money or to even complain, quite frankly.  The expectation discussion is not an easy one to have but as most things in life you have to ask for what you want.

The compensation discussion may not always go according to plan, but it is telling nonetheless.  If you are valued than the company will find a way to meet your expectations and if you aren’t valued they will not and will likely make it clear to you that your expectations are unreasonable.  If the latter is the case then you need to make some decisions regarding your career.

 

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