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Recently I have interviewed with a company about a position and was fortunate enough to receive an offer. I asked for a certain dollar range for salary compensation, and was offered a "Salary" + "Bonus" offer to get into that salary range. I'm a little apprehensive about the deal because it's not in guaranteed money, but I've never really worked at a company with an extensive bonus plan. My question is

  • "What do I have to lose with a bonus plan? and is it something that I should be worried about?"
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    Personally, bonus = hope. Do not capitalize on your salary. Bonus are often frozen for different reasons: bad sales year, raw materiel cost hiking, HR change rules, company is being acquired, merged, whatever. Also, goals to get those bonus are often blurred. it is more related to your boss relation, you have a fight with your boss, may be your bonus is gone. – Sebastien DErrico Apr 24 '17 at 18:38
  • it would depend on the motivation for it. If a small company, it might actually work to your benefit to have it structured that way if you're an engineer which tends to be a "silent" job. I would request 75% of the difference in salary and ask for some bonus structure. – timpone Apr 24 '17 at 20:21
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What do I have to loose with a bonus plan? and is it something that I should be worried about?"

When making this decision, I would not count on getting a bonus. A bonus is discretionary meaning that you may or may not get the bonus. The company may have every intention of paying out bonus money, but if the company doesn't do as well as expected, the bonus is usually out the window.

In summary, count on the salary, and the bonus is just that, a bonus.

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    To add to this (totally on-point): Make sure you have a good understanding of how the bonus works. They could tell you that you'll get a 7% bonus, but what they really mean is that you have a 7% bonus potential, which you'll never get all of. – silencedmessage Apr 24 '17 at 18:39
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    So with this lead I'm told a 40% bonus given quarterly, and supposedly that is agnostic to the performance of the individual contribution. – DEnumber50 Apr 24 '17 at 18:49
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    @DEnumber50 Your bonus may be tied to departmental or organization goals, too, i.e. you did well and your department did well, but overall as an organization you only met 10/13 goals, lopping a big chunk off your potential bonus. There's also supplemental wage. They get taxed 25% plus any other taxes or fees before they're added to your wages. – CKM Apr 24 '17 at 19:51
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    It depends on the company. I was in OP's situation a while back, but I have a friend within the company who confirmed that bonuses were all but guaranteed. So try to butter up someone on the inside and see what's what. – SPavel Apr 24 '17 at 20:35
  • I'd second @SPavel 's advice. I've never worked for them, but I've had several people tell me that "guaranteed in anything short of the apocalypse" (ie probably not in 2008/2009) bonuses are typically a significant fraction of total pay in NYC financial companies even for junior non-finance employees. – Dan Neely Apr 26 '17 at 23:28
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It sounds like you are not quite clear on how this "bonus" even works. In a comment you say the bonus is given quartly at 40% regardless of personal contribution? That in itself is not clear (to me) - 40% of what? of base salary for the quarter?

It is indeed hard for anyone to give much advice as all companies are different. But I do not advocate listening to what they TELL you, you really should have the terms of the bonus in writing, especially if it's going to be a substantial portion of your compensation AND reduces your actual salary.

You should be able to find the straight truth about the nature and possible conditions of this bonus if you just look at the employment contract/offer letter. If the contract says "employee will be paid bonus every x months at y amount, regardless of performance", as you have been told, you might actually be fine. But remember: the contract is all you're going to have going forward if you take the job, so you should take it at face value and believe what it says, independent of what anyone tells you verbally. It's that simple.

You don't include any location information but just in case: I had honestly never seen a scheme like this where the offer is presented with a "salary" that is rolled up with a fully discretionary bonus until I moved to Germany (I'm from the US). Provided this isn't a christmas or vacation bonus (these are special), from what I have seen, the "bonus" was never a carrot, it was always a stick. I can't help but wonder if you are in Germany due to the "DE" in your username, so if you are, please be aware that you might encounter lots of mobbing at bonus time under this kind of scheme (where they are basically holding money you NEED hostage).

  • From the U.S. and it's 40% of my base salary spread out quarterly over the year – DEnumber50 Apr 25 '17 at 15:11

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