Should I ask about the bonus that is due during leaving?

Question

I am due for bonus from my current employer "X" in the month of January 2013. This amount comprises of about 15% of my Annual Gross Pay (AGP) and is variable. I have a new offer in hand and the new company "Y" wants me to join in November 2012. I've already negotiated with Company "Y", which is a large and well-known company, and received an offer, so it is unlikely I can negotiate further. In comparison, company "X" is a much lesser known company (they work in a niche domain), but I have been working here for 7 years. I am planning to put down my papers, but would it be reasonable to ask my current employer to pay the bonus on a pro rata basis? If so, how can I put it across them in a polite way?

P.S: People who join "X" in the middle of the year get the bonus based on proportional period of time they have worked in that year, but I do not know the case for people who leave the company.

Answer 1

I'd be stunned if how you ask makes any difference. If it's not in your contract that you get a prorated bonus payment on exit then you won't get one. If it is (against all odds) in your contract then you will.

After all, beyond keeping to the terms of a signed contract, what could possibly be in it for them?

The first year, it gives you a hint of things to come, puts you in a positive mood for the year ahead. The morale benefits are considered higher than the financial cost.

But in your last year, there is nothing for them. You're leaving. They don't care if your morale remains high. It's just a financial outgoing.

All that said, while I personally wouldn't bother, I guess you have nothing to lose by asking the question. Maybe something like "Just checking so that I know where I stand, financially: As I'll be leaving near the end of the year, will I be entitled to the annual bonus (or part thereof)?"

Answer 2

Finance/Banking is an industry where most companies give their bonuses around the same time, so many employees change companies shortly thereafter. Very few people leave before getting their bonus. I've heard of getting paid for left-over sick days, but not a performance bonus.

There are a few points you could mention in your request:

1. 7 years with a company is probably more than average in the tech world.
2. You gave plenty of notice.
3. You've been cooperative in helping the company make the transition (e.g. wrapped up projects, produced additional documentation, trained new programmer, etc.).

IMHO, if you haven't done all of these, you have no right to the bonus and you risk "burning the bridge" with this employer. You may be showing some guts by making this request, but it shows a lack understanding of how the business world works.

In some places in the US, if this were commission, they would have to pay it to you.

Answer 3

Nope, because the bonus due is due after you leave.

The bonus is, among other things, an incentive to keep you around. If they payed out pro rata whenever someone left, they'd lose that incentive. In my line of work (software development), bonuses are sometimes offered as an incentive to get the project done on time. The bonus is thus conditional on two things; first, that the project is completed by deadline (completed having the meaning of "the client agrees that development is complete"), and second, that you are still employed as of when they pay the bonus.

Answer 4

You worked in X for 7 years. If you have a look at what is written on your "performance review" papers from the previous year, you'll likely to find a fineprint at the bottom of the page saying "to receive this and that you must be employed by X and not be under a resignation notice at the payment date". In that case you may try to negotiate a join in bonus with Y, but you should have done this before accepting the offer.