Buyout my bonus

Do you want next yearís bonus ahead of time? Hiring banks are said to be increasingly willing to buyout the bonuses of the staff theyíre hiring.

Given that US banks have only just paid out their bonuses, it may be a little early in the year for their employees to expect anyone to buyout your bonus for the whole of 2007. But if you work at the likes of Mitsubishi UFJ, which has yet to pay, now may be the time to make your move.

ìAn employee might have nine months of bonus accruing at one bank,î says Richard Parnell, the Asia-Pacific head of recruitment firm Robert Walters. ìA new employer would rather not buy it out, but thatís what theyíre having to do.î

The phenomenon is reportedly occurring in second tier management and department heads and above, particularly at senior vice-president/director levels.

Parnell says eFinancialCareers he noticed the trend emerging towards the end of 2006, the first time he had seen it in any significant numbers since 1998/99, the last time investment banks in particular found themselves scrambling for staff.

For the target hiring, the bonus credit can be significant, with many expecting bonuses of 150% to 200% of salaries, which at that level are usually in excess of AU$200k.

Ian Wilson, executive director of Boydon Partners, says he too has noticed an increase in such tactics in recent months. ìIt hasnít become standard, but it is becoming common.î His firm was recently involved in a financial services industry hiring where the candidate was paid a bonus equivalent to three times his annual salary.
ìClients canít wait until after bonuses are paid,î he says. ìIt is a way of breaking the cycle.î