<story><title>The End of the Bonus Culture Is Coming to Wall Street?</title><url>https://www.bloomberg.com/news/articles/2020-01-13/traders-unlearn-bonus-culture-as-machines-invade-wall-street</url></story><parent_chain><item><author>whack</author><text>I&amp;#x27;ve worked in the industry and gotten multiple job offers over the years from them. It still blows my mind that &amp;gt;50% of your compensation is issued as a once-per-year completely-discretionary &amp;quot;bonus&amp;quot;. It mostly works fine, due to firms wanting to safeguard their reputation. But if for any reason, you piss off the wrong person or the firm has a bad year, you will lose 50% of your expected compensation... retroactively for the work you had already done in the past year... with no legal protections or recourse whatsoever.&lt;p&gt;Sure, tech companies have significant bonuses and RSUs as well. But the bonus is more limited in size. And the RSU vesting schedule is more fine-grained, explicitly defined in your employment contract, and the stock valuations are determined by the wider market.&lt;p&gt;Imagine working in finance for a year, expecting to earn $300k for a year&amp;#x27;s work, and then finding out at the end of the year that you&amp;#x27;re only going to get a fraction of that. It blows my mind that this doesn&amp;#x27;t scare more people.</text></item></parent_chain><comment><author>TrackerFF</author><text>But then again, what&amp;#x27;s the retention rate in analyst classes? Probably half of the classes quit after their analyst stint, either for greener pastures, business school, or complete career changes. Some stay for their associate roles, or come back for associate or VP after business school - if they even bother with investment banks.&lt;p&gt;Adjusting bonuses like that seems like a cruel way of enforcing &amp;quot;up or out&amp;quot;. If for whatever reason you don&amp;#x27;t like some subordinate, or think they&amp;#x27;re cut out for future promotions, just hand out mediocre bonuses until they jump ship.&lt;p&gt;I think that in banking (and many other businesses), it&amp;#x27;s entire possible to be a good &amp;#x2F; well-performing junior banker, but not necessarily have the skills of succeeding in more senior roles, where your job is very different. (e.g mostly dealing with clients)</text></comment>
<story><title>The End of the Bonus Culture Is Coming to Wall Street?</title><url>https://www.bloomberg.com/news/articles/2020-01-13/traders-unlearn-bonus-culture-as-machines-invade-wall-street</url></story><parent_chain><item><author>whack</author><text>I&amp;#x27;ve worked in the industry and gotten multiple job offers over the years from them. It still blows my mind that &amp;gt;50% of your compensation is issued as a once-per-year completely-discretionary &amp;quot;bonus&amp;quot;. It mostly works fine, due to firms wanting to safeguard their reputation. But if for any reason, you piss off the wrong person or the firm has a bad year, you will lose 50% of your expected compensation... retroactively for the work you had already done in the past year... with no legal protections or recourse whatsoever.&lt;p&gt;Sure, tech companies have significant bonuses and RSUs as well. But the bonus is more limited in size. And the RSU vesting schedule is more fine-grained, explicitly defined in your employment contract, and the stock valuations are determined by the wider market.&lt;p&gt;Imagine working in finance for a year, expecting to earn $300k for a year&amp;#x27;s work, and then finding out at the end of the year that you&amp;#x27;re only going to get a fraction of that. It blows my mind that this doesn&amp;#x27;t scare more people.</text></item></parent_chain><comment><author>dasil003</author><text>Well it goes with the culture of investment banking: high-risk, high-reward.  Once you are in, of course, they give you the ol’ wink and nod about how much of that risk they are actually taking on.</text></comment>