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Thanks for the Bonus, I Quit

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Re: Thanks for the Bonus, I Quit

#581

Post by drfuchs »

maerF0x0 wrote: post #566
drfuchs wrote: post #246

Earlier quoted context omitted.

Super-early employee here. Pay for your options your first day of employment. They should be inexpensive; and your employer should be willing to give you a signing bonus to cover it (after all, the money just goes right back to them). Then when you leave, you get to keep all vested shares with no tax consequence, no need to pony up any cash, and no need to sell right away. Worked out great for me.

> They should be inexpensive; and your employer should be willing to give you a signing bonus to cover it (after all, the money just goes right back to them). The first part of this can be false. If you're 1/2 way to billions IPO then your options can easily be a year or more of salary to exercise. About the second part if the company gives you that as a signing bonus you're still on the hook to the IRS for the bonus…

If the company is half way to a big IPO, then any new hire is no longer "super early," and the advice doesn't pertain.

Re: Thanks for the Bonus, I Quit

#582

Post by [deleted] »

emodendroket wrote: post #531
74d-fe6-2c6 wrote: post #421

Earlier quoted context omitted.

> On the other hand, when you just go in to work, do a reasonable amount of effort, then you can work better with others with less stress, and in the end, who cares about "those few extra units"? That's exactly my MO. The extent to which many people start to overidentify with their job is almost comical. If they are lucky it may actually pay off at least. But more likely than not they are just deferring the inevitabl…

Yeah, of course it is. But you also spend a lot of time there, so I don't think it's unreasonable to try to find something you can be proud of delivering.

[deleted]

Re: Thanks for the Bonus, I Quit

#583

Post by jacurtis »

greggman3 wrote: post #147
jedberg wrote: post #17

When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…

Honest question, what's a reasonable solution for a small company (since it's easier to do thought experiments on a small company). You're a business owner. You hire 3 people. You pay them salaries. That year the company does really well. You want to thank your employees. You're not going to just give them raises because there's no guarantee you'll do as well next year It sounds by Netflix logic you should just keep…

For a small company like that I would implement basic profit sharing. Set aside a certain percent of company profits (10-15% is fairly common) and those profits are distributed among the employees.

The way you distribute it among employees can get tricky. If everyone is in a similar position you could split the pot evenly. Otherwise you can implement a points system. Maybe the lower level employees get 1 point each. The manager gets 2 points. At the end of the year the profit pool is distributed per share (so the manager would get twice the bonus of the lower level). This is the easiest way to manage it. You'd want to run some hypothetical numbers first and talk to an accountant, etc. But this is a good way for a small company to manage bonuses.

Don't worry about Netflix. The Netflix strategy is that they are overpaying you to begin with, so bonuses become less important. They also have programs where employees can buy discounted public shares in the company and stuff like that. So it's a whole different ballgame they are playing. Don't even try to compare yourself to them. I am currently in the interview process right now for a position at Amazon and they follow a similar strategy to Netflix. You have public share buying program that allows you to do well with a growing public stock, plus the base salary they are offering is insanely high (higher than it should be honestly). So despite not offering a bonus program, it is still a good deal because they are paying you so much that the bonus doesn't matter.

I worked at a small company of < 10 employees when I was first starting my career and they did a profit sharing program like what I listed above. A certain percent or profits were set aside and split among employees. I was a higher-level position so I got a significant portion of the profit pool. As the company did better the bonuses became VERY SUBSTANTIAL. I was getting under-paid with my salary, but after bonuses it put me in the top 5% for salary ranges for my job title. The owner was happy because he allowed me to be highly paid, without the risk of paying high salaries up front. Granted it wasn't all wonderful. I did hold a grudge that I felt like I had to wait out the bonus each year because if I didn't get the bonus than I was just getting a moderately low salary for my position.

Re: Thanks for the Bonus, I Quit

#584

Post by maerF0x0 »

onemiketwelve wrote: post #366
faeyanpiraat wrote: post #314

Earlier quoted context omitted.

You really shouldn’t feel bad, because what happened has a low probability. It’s like saying I should’ve invested in X which got quadrupled in price last year. Most stocks (even very promising ones) didn’t achieve anywhere near that growth. So you choosing the right one among the many to “shut up and stick to it just a little bit longer” has a low chance of exceptional returns on your investment. You cannot see the f…

Exactly. This is like being dealt a horrible set of cards in poker and kicking yourself for folding. Let's say you got 2,7 and then found out the cards on the table turned out to be the rest of the 2s. Folding was still the right move

You're right as an analogy, but don't take this as exact poker advice.

Poker isn't just about the cards you're dealt, but also the the players you play (with). I wonder if there is a similar idea/point about startups?

Re: Thanks for the Bonus, I Quit

#585

Post by JJMcJ »

jedberg wrote: post #17

When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…

The compensation expert Graef Crystal was for a long time a consultant to executives who were negotiating their contingent bonus packages. Sometimes there wouldn't be any bonus at all in bad quarters/years and his clients would claim bitterly to him.

https://en.wikipedia.org/wiki/Graef_Crystal

As to eBay, for people who aren't truly poor, running your expenses up so close to the limit that losing 6% means your financial life is in ruins is a very bad way to live.

Re: Thanks for the Bonus, I Quit

#586

Post by outside1234 »

JJMcJ wrote: post #585
jedberg wrote: post #17

When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…

The compensation expert Graef Crystal was for a long time a consultant to executives who were negotiating their contingent bonus packages. Sometimes there wouldn't be any bonus at all in bad quarters/years and his clients would claim bitterly to him. https://en.wikipedia.org/wiki/Graef_Crystal As to eBay, for people who aren't truly poor, running your expenses up so close to the limit that losing 6% means your financ…

Welcome to Silicon Valley, where people bid the most they possibly could afford, assuming a great bonus, for everything.

Re: Thanks for the Bonus, I Quit

#587

Post by kec »

jonny_eh wrote: post #542
jedberg wrote: post #17

When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…

Bonuses also mess up tax withholdings.

How? Company should withhold just as they would any other pay. Even if you get dumped on and it bumps you up a bracket it likely won’t have a huge impact as you’ll likely not have a ton of pay in that bracket.

Re: Thanks for the Bonus, I Quit

#588

Post by zepto »

maerF0x0 wrote: post #567
alasdair_ wrote: post #546

Earlier quoted context omitted.

I currently have a six figure tax bill because of exactly this issue. And I can’t sell the shares to anyone because transfer is forbidden.

> And I can’t sell the shares to anyone because transfer is forbidden. IMO this should be illegal. It's your property and they should not be allowed to bar it's sale.

Shares aren’t really ‘property’. They are a financial / legal instrument created by statutes and contracts.

Re: Thanks for the Bonus, I Quit

#589

Post by kolbusa »

danieltillett wrote: post #398
kolbusa wrote: post #227

Earlier quoted context omitted.

I've been on the 'lucky' side of many layoffs. It is always good to remember that the responsibility of a corporation is to shareholders, not employees.

Yes, but it is not quite so clean. Employers are humans and in my experience they care far more about the people they know (employees) than abstract people (shareholders).

(This is just my opinion; and I have never been personally laid off -- the quotes in my first message are more about the fact that I actually might have been better off if I was...)

Your manager is likely to care (not always in my observations), but there can be various reasons for that (affected deliverables (compensation); bad experience of delivering the news, etc.). His manager may care. Next level manager is much less likely to care, and so on. And the decisions are usually made on the level where I doubt people care much. People on that level may not like that they have to lay off people and have some sympathy for those affected, but they will lay them off as soon as they think it is necessary for one reason or another. It's their job to keep _the company_ going, not to keep _you_ employed.

Re: Thanks for the Bonus, I Quit

#590

Post by BikiniPrince »

jedberg wrote: post #17

When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…

I had a similar program and there was also incentives based on year end leveling.

We met all of our goals, but because I was 11 months in they cut it in half.

Then I was supposed to receive the top performance award. However, they gave it to another coworker because I had only been there not quite a year. This of course reduced my bonus by half, but again the monetary award was further reduced again. In the end, even though I was leading all the projects and getting things done I received a quarter of what I should have gotten. The full top grant was given to someone who did basically nothing and came to work maybe three days a week. He was also drunk those three days.

I quit two weeks later. Mostly because a friend called because they had reqs open and they were offering me a 25% increase in pay. That wouldn’t have been as competitive if they hadn’t played so many games.

I heard all on my in progress projects stopped because no one knew what they were doing.

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