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So I have this ongoing negotiation with my recruiter. The original job offer included a signing bonus (of a significant amount) and the basic pay is 15% short of my expected salary. Eventually they bumped up the basic pay and is now 10% short of my expected salary, but they removed the signing bonus. How do I deal with this?

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    I'm afraid we cannot help you with this decision. They offered something, you aren't happy with it, they changed the offer, you aren't happy with it. You need to make the final decision whether you are going to take it or not. – nvoigt May 13 at 5:53
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Do the math. Figure out how many months you'd have to work at the increased pay to make up for the lost signing bonus. If you intend to stay at the company for at least that long, then it's worth it.

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    When doing the math, consider that a large signing bonus might push you into the next tax bracket for that year, causing a greater then normal amount of that bonus to be lost to tax then would happen with a salary increase stretched over several years, as well. – Magisch May 13 at 8:39
  • @Magisch Don't forget the amount he could generate by placing the bonus in some term deposit plan or something. – Bhoot May 13 at 11:13
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How do I deal with this?

As with any other negotiations, you decide what you need and what you want.

If their offer is below what you need, you reject it. If necessary, you simply walk away and attempt to find a different employer who will give you what you need.

If their offer is below what you want, you make a counter offer and hope for improvement.

At some point you'll either conclude that the offer is satisfactory and then accept it, or conclude that it will never be satisfactory and then walk away. It's all up to you.

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If your expected salary is non-negotiable, then you'll have to decline their offer. It's always possible they will come back with a counter-offer that matches your expectation, but it's not a guarantee.

Don't put too much weight on the signing bonus -- even if significant, the bonus is a one-time event. Plus, you'll have to pay taxes on it, which further reduces its value.

Companies are more likely to give away bonuses than salary increases, because a salary increase is an ongoing, perpetual obligation for the company. The fact that they increased your base pay is a good sign.

Also consider that your base pay is what you'll take to your next employer for future negotiations. You can't do that with a signing bonus.

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I'll add one tip: Ask yourself!!

  • Are you happy with the increased basic pay? It's still 10% less than you expected. The one time bonus amount is just that - one time. It'll not be repeated and your fixed salary will be what you'll be entitled to get for the long-run. Even with the one-time bonus - will it be enough to match up your expectations in the long run? How long before you realize you're underpaid and lose motivation?

In my opinion - unless you need that signing bonus for some urgent purpose, do not bank on it. Rather negotiate to have a fixed remuneration as per your expectation. Bonus - if any, can be considered over and above your fixed salary - not as a part of it.

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If their offer is below your expected salary, and your expected salary is reasonable, then don’t accept the offer, unless either you are absolutely desperate for money to come in (and you start looking for a better place immediately), or the place has some huge benefits that are not part of the salary.

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