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Currently I am working at a company A (for the past 10 months). Recently I have received a very good offer from a company B and therefore I am planning to join the company B within a couple of weeks. During the negotiation process with the company B, I quoted amount $40K (not a real number) as a signon bonus by saying that I need to payback around $20K (not a real number) to the company A if I leave the company A within 1 year. The company B agreed to provide $40K as a signon bonus. However, recently I have realized that I only need to pay $10K to the comapny A if I terminate my position within 1 year. I am planning to inform this to the company B. However, I am afraid that they might think that either it is silly or I am putting "a show" as a honest person. However, I will feel bad about it if I hide this fact with the company B. How to deal with this? Please help me.

Update:

I am providing some more information here to clarify some of the comments.

Initially the company B agreed to provide a sign-on bonus of $30K. However, I requested $40K by saying that I needed to pay $20K to my previous employer. The company B has agreed to provide $40K as a sign-on bonus. The amount comes directly to me. Later I have realized that by mistake I calculated the repayment as $20K instead of $10K.

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    Maybe not confused, but definitely mention that a mistake was made with either your personal records or with company A and you only in fact need to pay the lesser amount. – acolyte Jun 4 '13 at 17:37
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    Why would you feel bad. You told company B that to hire you on they need to pay a sign on bonus. They agreed. If they had said no they would not suddenly get a conscience and think well maybe your kids need to eat after all here is the bonus. – IDrinkandIKnowThings Jun 4 '13 at 18:15
  • @Chad: If the amount of the signing bonus was based in part on repayment of company A's bonus, it should be corrected. – Blrfl Jun 4 '13 at 19:00
  • @Blrfl - Only if that is stated in the contract. Otherwise it is a signing bonus to do what the OP wishes. The OP negotated in good faith believing they needed X to accept. That they could have actually accepted with 3/4X is irrelevant. – IDrinkandIKnowThings Jun 4 '13 at 19:22
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    Putting on a "show" of honesty? It's not like you intentionally set the building on fire so you could save eveeryone. – user8365 Jun 4 '13 at 19:59
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Executive Summary

As yourself three questions:

  • Did you intentionally lie to the company?
  • Would the disclosure of this information have changed the outcome on the company's side?
  • Will the disclosure of this information now change the outcome on the company's side?

If the answer is "no" to all three, you are probably making a mountain out of a molehill. I would advise disclosing information like this only when it clarifies your intent, impacts the result, and impacts the future relationship with the person.

Intent

If you were lying to the company as a negotiating tactic, bringing it up now would be folly. "Golly gee, I was being deceitful during negotiation, but I feel so bad I'll bring it up now!" So let's presume you didn't do this with intent to deceive.

So how will the company react if there was no ill intent and you bring it up?

"Thanks for letting us know samarasa. So you're saying you're incompetent and don't actually pay attention to things as significant as your current employment contract when negotiating? Are you sure you properly read the clauses on your rights to terminate your current contract, and your notice period?"

Nothing good will come of sharing this information -- it will look like you made a $10k mistake (you did), and in the worst case they will assume that it's a guilty conscience after using an ill-conceived negotiating tactic. Neither of these will set you off on the right foot with the new company.

Impact on the Original Outcome

So let's say you had said something different during the negotiation. Rather than, "I need an additional $10k to cover the payout at my prior company" you say "I need an additional $10k" with no conditions. Would this have changed the outcome of the negotiation?

To the company, the outcome is the same. They either think you are worth paying an extra $10k, or they don't. You already have the base $20k not being used for the payout, so even if they refused the additional $10k, you could just use a portion of your signing bonus to pay for it if needed. At the end of the day, $40k is $40k, regardless of how you use it.

Impact on the Future Outcome

What will disclosing this actually accomplish?

Do you really think the company will respect you more for trying to return $10k? Do you think that this will somehow significantly impact their financial stability?

Even if you do tell them they were wrong, it isn't like they are going to change the $40k to $30k, after already explaining to their bosses that they need budget for $40k signing bonus. "Hey boss, remember that guy I said we needed 40k to hire? Turns out we only need 30k because he doesn't know how to read employment contracts." Do you really think that's a conversation someone in hiring wants to have with their boss?

What if you actually had a contractual obligation to pay $20k to your current employer, but due to excellent negotiation skills were able to talk them down to $10k. Would you still bring that up with your new employer?

Use Common Sense

For many companies you can look up annual revenue and/or profit. If that information is available, take a look at it. Calculate what the ratio of profit would be with/without your $10k bonus for the latest available year. Will it really have an impact?

This is a one-off payment by the company. It's probably been accounted for in the budget, and will never be thought of again. It creates no future liabilities, and is a rather cheap investment if you end up panning out.

Rather than creating more work for people to run around dealing with what I'd consider an incredibly odd confession, focus on creating value for your new employer. Do a good job, and the $10k looks like peanuts.

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    This is one of the best answers I have ever seen. Thank you. – samarasa Jun 6 '13 at 5:03
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Did the company B mention it is specifically a sign on bonus ? If yes, its a sign on bonus. Not a payout amount. What you use the sign on bonus for is upto you. However if you had wrongful intent during this process, due to which you got the said amount as bonus, it is best to come clean.

Nevertheless, if I were you, I would drop in a mail thanking company B for the offer and the signing bonus. The mail would also reinstate that 40k was a sign on bonus and that there were no strings attached to it (of course, other than having to pay back a part if you quit within some period of time). I would also put in a point saying it was my mistake to not confirm the exact amount that I would have had to pay to company A. The exact amount is X and I was under the impression it is Y.

For all you know company B gives a sign on bonus to everybody.

EDIT : Just read your edit. I see no need of any clarification. As Chad says "beyond what is already there" and let things be the way they are and let this be a learning lesson for the future.

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    There is no way I put any of this in official writing to the new company beyond what is already there. – IDrinkandIKnowThings Jun 4 '13 at 19:26
  • @happybudha: Yes, the company B specifically mentioned as a sign-on bonus. – samarasa Jun 4 '13 at 20:46
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I suspect that no one will ever remember (or even care) why you requested $40K. Companies offer their sign-on bonus expecting to negotiate with the prospective employee. $30K was their initial offer and they expected you to negotiate for more. Maybe they were willing to go to $50K if you had negotiated harder. They are happy with $40K and so are you.

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    As a side note, this is also part of why you (usually) shouldn't try to justify things in a negotiation. Telling the other party "I need this because A" gives them leverage and lets them argue on the basis of A, when most of the time all they care about is that it's your requirement. – Tacroy Jun 5 '13 at 23:51

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