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Severance bonus

Severance bonus

Severance bonus

(OP)
OK,
So I accepted an offer with another company to start probably in next 4-8 weeks (still haven't decided).  Today my current company announced that fiscal year is ending in 2-1/2 weeks and we are doing very well and that there will likely be a large bonus payout.  (maybe 6-7% of salary)  Only thing is that the payout comes the second month after the end of fiscal year, and I might not be here then.  I don't know if they could write me a check after I am no longer an employee and I haven't given my notice that I am leaving.  My thought was to ask for a severance bonus equal to the bonus payout when I leave.  Has anyone ever asked for and gotten a severance bonus?  I have been here nearly 6 years and have always been a good employee.  

The other option I have is to stick it out here and try to coordinate my leaving with the payout, but that might be longer than either I or the other company want to wait.

"I have had my results for a long time, but I do not yet know how I am to arrive at them."  Karl Friedrich Gauss

RE: Severance bonus

This is somewhat akin to buyer's remorse.  If the announcement had been less favorable and you wouldn't have gotten any bonus, you still would have left and felt that you had a good deal.  

So this is irrelevant.  If you get something, then great, otherwise don't blow your new deal, and don't leave your old company looking like a money-grubbing job-hopper.

TTFN



RE: Severance bonus

Your bonus will be: "Best of luck in your new position.  We are sorry to see you go."  The type of bonus you describe that is in the works is normally reserved for employees, as incentive to continue to work hard.  I would be shocked if your portion was sent to you as a non-employee, and not distributed to the actual employees, or pocketed by the company.

I could just see it now:  "You decide your leaving us, and you want us to pay you extra to leave? Get the _____ out of my office, and pack up your desk today!"

Or perhaps they will say:  "Thank you for finding a reason for us to incur the cost of hiring a new person.  You do deserve a bonus for that."

By the way if you do ask, and get it, please post how you did it on here.  I would love to improve my income by switching often, getting pay raises, sign on bonuses, AND severance bonuses.

RE: Severance bonus

Most bonus plans are written such that you must be an employee at the end of the bonus period.  You do not get a pro-rated bonus for time worked during that bonus period if you are not around for the end of it.  (You are pro-rated if you are hired into the middle of a bonus period and remain gainfully employed.)

In your case, it definitely depends on how they decide to officially issue the bonus.  If you were working there at the end of the fiscal year and it takes 2 months for accounting to cut the checks, you may get one.  If you leave one day prior to the the fiscal year, you probably will get a happy life where the grass is greener.

--Scott

For some pleasure reading, try FAQ731-376

RE: Severance bonus

Where I work no one gets any severance. When the company no longer needs/wants them, they are told Friday afternoon that they need not come in on Monday morning. This is not even enough warning to pack up their belongings before the workday ends.

RE: Severance bonus

I would be surprised if they would want to give you something. That money could go to the folks that are staying.

I got left out of a Christmas bonus once, except I was leaving in January, which was after the bonus was being given out.  The next position made up for it in pay and experience.

RE: Severance bonus

nate2003,
I would talk to your new employer about delaying your start date and I would also be upfront about the reason.  I wouldn't say anything to anyone at your present employer about leaving, if you do, kiss that bonus goodbye.  Loyalty number one is to yourself and your family.  A former supervisor of mine found himself in the same position and the rest of the people at his level divided his bonus amongst themselves. Go figure.....
Regards,
RLS

RE: Severance bonus

Normally, a severance pay is when the company decides to send you packing.  I've not heard of one when the employee left- with the exception of early-retirement type buyouts.

RE: Severance bonus

If you want the bonus, stay until it's paid. Ethically, that's fine -- you've already earned it. However, to ask for it on your way out the door is a cheeseball move of the first order.

--------------------
How much do YOU owe?
http://www.brillig.com/debt_clock/
--------------------

RE: Severance bonus

You're not going to get the bonus if you leave now. They probably won't give it to you if you tell them you're staying until after the bonus is given out...

RE: Severance bonus

I was in the same situation, usually my former company would pay the bonus in April's salary. Well, I got a job proposal and I ended up leaving the company in the 2nd week of May ( I gave my resignation notice in April). Did I see the bonus? NO, I didn't even bother to ask.
If it was today would I do the same thing? Most probably. The experience and conditios of the other job were much better.
Of course, if I see just from an employee point of view, I would have deserved the bonus since I worked all the previous fiscal year. By the other way, the company doesn't give the bonus because it is nice, it gives as a way to retain employees and increase motivation.
Frankly speaking, I think that I agree with company's point of view even if in my case I lost most probably over a month's salary.

RE: Severance bonus

I once (in 40 years and 30+ jobs) got a bonus almost a year after being laid off.  I called the payroll office because I thought they had made a mistake.

Some factors were different from your situation:
- It was an exceptional company.
- I didn't choose to leave, they downsized me.
- It was an individual bonus based on achievement of specific goals.  The payroll department administered it, and there was no provision for forfeiture.  I don't know if that was intentional, or an oversight.



Mike Halloran
Pembroke Pines, FL, USA

RE: Severance bonus

I am dumbstruck by the original question...

Why would someone expect a severance payment if they choose to leave employment?  Maybe the company should instead demand repayment of any wasted training costs?

RE: Severance bonus

They fire you, you get severence (to sever is not usually a pleasant thing)

You choose to leave, you get nothing.

---------------------------------------------------------------------------------------------------------------------
pimp

"The world keeps turning, it keeps me in my place; where I stand is only three miles from space"
Spiritualized

RE: Severance bonus

A bouns is paid in respect of a past year's work and  not in the hope you'll stay in future. If the year in question ends in April and you leave in May then you are entitled to that bonus, just as you are entitled to any future back-dated pay-rises from the time you were working. If you don't receive that bonus then give 14 days notice of intent to take legal action and then sue the company in the small claims court (if you have one in your country). It's cheap and you can claim back the money for taking the action (about £60) along with any pay you are entitled to. In the UK there is also a free citizen's advice bureau where you can take free legal advice if you're not sure.   

corus

RE: Severance bonus

If there is a company that makes severance to the employees that quit... now there is a company that I'd like to work for.

Wes C.
------------------------------
Light travels faster than sound. That's why some people appear bright until you hear them speak.

RE: Severance bonus

Most bonuses are conditional on 2 things.
1) Being employed during the whole time that the bonus award is based on.
2) Being an active employee on the day the bonus is paid.

Expecting a bonus after you have quit is not realistic.

Corus,
Sueing a compnay for a bonus that is paid after you quit is a joke. You have not fullfilled the 2 conditions I mentioned that entitle you to the bonus.

"Wildfires are dangerous, hard to control, and economically catastrophic."

Ben Loosli
Sr IS Technologist
L-3 Communications

RE: Severance bonus

I was "due" about an $8000 bonus at acompany I had been at for almopst 4 years. I left a couple of months prior to being issued the bonus. Technically, the bonus was for the previous year that I had worked there, so I had certainly earned it. But, there were no rules to the bonus- how, why or the amount were to be determiened strictly by the company and my boss. There was never anything in writing that even said I would ever get a bonus. It was tacked on to my salary after a couple of years just because I had taken on tremendous responsibilities and became a very valuable person in the company.

Because I left, because the bonus was so unstructured and because I knew my leaving would cause difficulties for my boss, I didn't even ask about the bonus- nor did my boss bring it up.

All's well that ends well. I would have loved the $8,000, but to me, it just didn't seem right in my situation.

That said, if your bonus is structured, in writing and applies to work already served, your situation my call for still receiving it. I think it all depends on the particular situation.

Ed

www.engineerboards.com

RE: Severance bonus

I would not ask for a severence bonus, that is not going to happen and if you are in the US, don't bother with small claims court, you will loose. But I would politely bring up the situation to the new employer and ask for an equivilant sign on bonus. That was what I did on my last job change and the new employer was willing to give me the sign on bonus.

If the new employer balks, ask about delaying your start date until after the bounus is paid. If he balks again, you have weigh the advantages of staying vs the advantages of leaving.

-The future's so bright I gotta wear shades!

RE: Severance bonus

I think there is some confusion over bonus and seberance.  To my mind a bonus and severance are not the same thing.  You get abonus if you have completed good work and the comany want to reward you.  Severence is the company trying to sweeten the fact they have just fired you.  Its not the same thing.  I feel you are entitled to ask for a bonus if you deserve it but not severence pay.

RE: Severance bonus

You know, there is one possibility that we may be missing here... Maybe what the OP is really asking for is some "hush money" to keep him quiet for something "illegal" that the company is doing (maybe that's why 1. he is leaving, and 2. the company is profitable).

This, to me, seems just as likely as the company giving the OP is "bonus" as "severance."  

Wes C.
------------------------------
Light travels faster than sound. That's why some people appear bright until you hear them speak.

RE: Severance bonus

I agree with SomptingGuy.  I can't believe folks are even entertaining your question...you want a severance bonus?  Go ahead and go ask them and then come back and tell us how far they throw you out in the street.

Most folks who want to have their cake and eat it too end up a lard arse, choke on it, or both.

Brian

RE: Severance bonus

I ran into a similar situation with my very first job. I was 'owed' a bonus, it was due in August and was past-year performance based, and had still not received it in October.

I found a new job and then hounded my boss for my bonus before I gave notice I was leaving.

To my bosses credit, he didn't bat an eye when I announced I was leaving two days after finally getting my bonus check.

RE: Severance bonus

I see it as earned money for the past years performance.  But companies put condition on the money that will most likely prevent you from getting the bonus.  Now if this was a hiring bonus and you left the company after a short time for whatever reason you better believe they would come after that money.  For some reason it's always in the best interest of the company.  

Do you think Carly Fiorina deserved her 43 million severance package?  Part of her severance package was from past years performance.

But then again, like Chris said, you can give notice after collecting your earned bonus.  Or you could ask your new company to match your earned bonus as a signing bonus.

RE: Severance bonus

nate,

I think you should ignore any potential bonus/severance and move on soon, if that's what you really want to do. If you end up leaving shortly after they give you a bonus, they will probably be angry. Word of your behavior may circulate, possibly giving you a poor industry-wide reputation.

RE: Severance bonus

I say keep your mouth shut - wait for the bonus, then leave quietly.  I certainly wouldn't try and ask for it if I left before it was handed out and EddyC is right - you are risking a bad reputation but that depends on how much they liked you, how much you did for them to get the bonus and how quickly they can replace you.  They'll probably be a little choked at first and forget shortly afterwards.  

We have lots of guys who go get new boots and coveralls and then quit.  We laugh at it but really there's nothing the company can do and why not if they've done well for the company.  Depends on the employer... big company / lots of money probably couldn't care.... small company tight on cash will be fuming.

Personally I'd probably ignore the bonus altogether and leave since I had already decided to, plus I have a terribly guilty conscience.  

RE: Severance bonus

Pulpboy - why would you feel guilty taking something that you have rightfully earned?  Companies do stupid things often times at the employees expense but do you think they feel guilty?, that would be a big NO!  

Do you think Carly felt any guilt for what she did to "The HP Way"......in the six years she was at the helm she demoralized the employees by her bullheaded decisions.

RE: Severance bonus

Quote:

Most folks who want to have their cake and eat it too end up a lard arse, choke on it, or both.

As Billy Connelly once said "Oh you just want to have your cake and eat it too". F**king right! What good is a cake if you can't eat it?"

RE: Severance bonus

Wow, this one really splits people into two camps, the you have earned it and it is yours take it by whatever means and the why would anyone pay a bonus to someone who has just left?

It is funny how both camps can categorically state they are correct on a legal ground without knowing anything about your terms and conditions. My guess is if it is stated in there you will be entitled but if not you won’t.

As for asking a future employer to match this amount or start at a later date than agreed, I would view that in a very bad light if I was in their shoes, how would you feel if they started you on less money? Personally I would never ask for that as it seems morally wrong to me, but then again if I do not ask I will not get.

So legally I would guess it is down to your contract, morally only you can decide.

RE: Severance bonus

Tipically bonus is not stated in the contract since it is  variable and at the discreption of the company. I can see both sides since as I stated before I was involved in a similar situation, and both sides are right.
This looks like one of the threads that we split into two groups, repeat arguments and in the end nobody will be convinced to change side.
As such, and if the bonus is not in your contract as a mandatory payment, do what you feel it is right.
If you feel that it's yours, stay, receive it and leave.
If you feel that is wrong to receive it since you are leaving then act accordingly.
This all goes how do you want to leave the company.
I prefered to leave it without the bonus and with strong friends (even my bosses) that I know I can count on in the future.
Would it be the same if I just grabbed the bonus and kiss them goodbye? I don't know.  
Do whatever suits your conscience knowing that any of the decisions have advantages/disadvantages as everything in life.
Good luck and let us know how it went.
Regarding the severance bonus, I think that your boss had to be smoking a lot of strange stuff to agree on paying you anything when the decision of leaving is yours.

RE: Severance bonus

I recall my original contract stated something like: "The company may decide to pay you a bonus."  Non-commital, although the bonus calculation formula was explained at great length during my interview, including a history of recent payouts.  Oddly enough, it's gone now.  Apparently our low bonuses eroded moral, so the bonus scheme was canned.

RE: Severance bonus

Two words are being used here that are not interchangeable:
Severance does not = bonus
A severance is paid in some cases when the employer tells the employee to pack his bags. This is not a requirement but a "sorry we have to let you go" payment. If you leave voluntarily you will not get a severance payment.

A Bonus is paid to employees for doing a good job, because the company is making lots of money or other similar reason. If you are still employed by the company on the pay out date you will get the bonus. If you choose to leave the company and tell them before the pay out date, don't expect to get a bonus.

As far as telling the new employer you want to delay starting until you can get the payout from the old company? Talk about starting out on the wrong foot! If I had an offer out to a candidate and they came back with that I would reconsider their offer.

RE: Severance bonus

winpop123, it really depends on the market and how badly the new employer wants to hire him/her. When I was in this situation, I made no bones about it. I told my new employer exactly how much bonus I was going to be leaving on the table by moving, and made it clear I was not going to do that. If he wanted me to move, he would have to do something with salary or sign on bonus to bring us together on the deal, or wait a few months for the bonus to be paid. If he had not been willing to do so, I would have been happy to stay at my previous employer.

The new employer gave me a sign on bonus that covered it and we had a deal. You only get what you negotiate, which is in my opinion morally neurtral, neither good nor bad, it just is. The reason that most engineers are so poorly paid, and the reason that most sales people are so well paid is that sales people understand the art of negotiation, and engineers are too timid to ask for what they want.

-The future's so bright I gotta wear shades!

RE: Severance bonus

SMS The original post states that he has ALREADY accepted an offer. I agree with what you say about negotiating but only up front BEFORE an agreement is reached. Before an agreement is reached, use all means available to get your maximum pay. After and agreement is reached, the negotiating is over.

Going back and starting up the discussion to try and milk more money and or time out of a new employer you have made an agreement with shows a lack of integrity in my opinion.

If your house burns down a day before you start the new job then yeah maybe you ask to move your start date.

RE: Severance bonus

To me at least there is a big difference between negotiating your terms of employment prior to an agreement being struck and going back after the event and asking for more.

The first is common practice be it in employment, buying a car, a house in fact many goods or services, however once that has been agreed it should be binding. I would not want anyone to do that to me so I do not do it to others, others will disagree I am sure.

RE: Severance bonus

My apologies, in the discussion I missed that he had already accepted the offer.

Sorry Nate you're sol. Write off the money and go make the best of your new opportunity.

-The future's so bright I gotta wear shades!

RE: Severance bonus

If you leave your existing job -try to leave with a good relationship, most employers ring & ask for references - if you create bad feling this can follow you for a long time.
Also having a good source of a reference can be the key to getting a job later on in life

Bruce L Farrar.
Works Engineering Manager
Marshalls Mono PLC.Brookfoot Works.
Halifax W.Yorks UK

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